Economy

Economy & Politics Life

Vimal named chancellor
of Jaramogi university

What to ask people

who switch jobs

Page 5

Page 6

Page 27

Average home loans

increase to Sh7.5m

TUESDAY, JUNE 9, 2015

NO. 2113

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

Bank jobs ise

to seven-yea
high as deposit
accounts hit 28m

DAMAGED

Lenders use technology to recruit

seven million customers in 12 months
BANKS STAFF AND CUSTOMERS

BY VICTOR JUMA

NAIROBI

Firemen inspect a restaurant that was badly damaged after re broke out at the Mayfair
Centre building on Ralph Bunche Road yesterday. The re was contained before it could spread.

S ALATON NJAU

CEOs admit ms cooking books

BY MUGAMBI MUTEGI

More than a fth of Kenyan executives have admitted to the existence

of nancial reports manipulation in
their rms, turning the spotlight on
the state of corporate governance in
East Africas largest economy.
Ernst and Young (E&Y), a consultancy, says in a newly-released
report that 23 per cent of Kenyan
managers believe irregular adjustment of nancial statements is prevalent in their rms, mainly driven
by pressure to meet ambitious tar-

gets in an increasingly competitive

environment.
The report, which was released
last week, also says 41 per cent of
Kenyan managers believe that
most companies report nancial
performances that are better than
the actual gures, an admission
that puts to question the integrity
of nancial reporting in the country.
Kenyan managers polled by the audit rm admitted to having knowledge of at least one of three forms of
nancial statement manipulation
happening in their rms over the

past 12 months, all driven by the

aim of meeting short-term nancial targets.
The survey, which was conducted between December 2014 and January 2015 found that the manipulation occurs through recording of
revenues before they are actually
received, forcing customers to buy
unnecessary stock and underreporting of costs incurred.
Our survey conrms that
some employees are willing to
misstate nancial information,
E & Y says after REPORTS, Page4

Kenyan banks last year aggressively expanded their operations, increasing the industrys sta count by 2,864 and the number
of customer accounts by 30 per cent to 28.4
million, according to the latest Central Bank
of Kenya (CBK) report.
The CBK says in the banking inspection
report that the banking industry now has
36,923 employees or 8.4 per cent more than
the previous years 34,059.
This was the second-largest wave of hiring in the industry after 3,834 in 2008.
The rapid growth in 2014 sta numbers
came on the back of an aggressive expansion that saw the lenders open 101 new
branches in a year.
The rapid growth in stang and customer numbers is linked to the rapid uptake of
nancial services in Kenya and in Eastern
Africa where 11 local banks have established
operations in the past 10 years.
The CBK report also shows that Kenyan
banks heavily invested in technology-driven
service delivery, including mobile and Internet banking that resulted in the opening of 6.5 million new deposit accounts, the
highest increase in a single year.

Efciency is at an all-time high, with

one worker serving 770 customers
Staff

Accounts
(mn)

2008

25,491

6.4

2009

26,132

8.4

2010

28,846

11.8

2011

30,056

14.2

2012

31,636

15.8

2013

34,059

21.8

2014

36,923

Kenyan banks continued to leverage

on robust ICT platforms in the provision
of quality banking services that are ecient and on a wider scope, the CBK report says.
Mobile banking contributed the most to
the rapid uptake of formal nancial services
among the previously unbanked population,
according to the report.
Banks have rolled out mobile banking
products on their own or in collaboration
with telecommunication BANKS, Page 4

Wamalwa vetting tops

agenda of Parliament

Come back home,

Uhuru tells Ngugi

Tanzania gives Kenyan

banks reason to smile

BAT Kenya share feels

the heat of tough law

How Kenyas tax

revenue is tied to
anti-corruption war

The vetting of Cabinet nominees

Eugene Wamalwa and Monica Juma
is expected to top the agenda of the
National Assembly which reconvenes
today after a month-long recess.

President Uhuru Kenyatta has asked

celebrated writer Ngugi wa Thiongo
to come back to Kenya. The country
has made huge steps in reforms, Mr
Kenyatta told Prof Ngugi yesterday.

Tanzania has turned out to be a rich

hunting ground for Kenyan banks
with subsidiaries in the neighbouring
country outperforming South Sudan
that has been hit by political instability.

Page 2

Page 6

Page 7

BAT Kenyas share has shed gains

made in May as foreigners exited
against a background of shilling
volatility and a tougher regulatory
regime which slapped a two per cent
tax on sales. Page 19

BRIEFING

NEWS INDEPTH

Pages 12 -13

28.4
SOURCE: CBK

BUSINESS DAILY | Tuesday June 9, 2015

TOP NEWS

Wamalwa vetting
top on MPs agenda
afte 1-month ecess
LEADERSHIP The law mandates Parliament to

scrutinise nominees picked by President in April

gation scheme in Tana River. President Kenyatta, in 2013, launched the
The vetting of Cabinet nominees Euambitious Galana-Kulalu project in
gene Wamalwa and Monica Juma is
which the government plans to put
expected to top the agenda of the Nathe land under irrigation to boost
tional Assembly, which reconvenes
food security.
today after a month-long recess.
The project has, however, stalled
President Uhuru Kenyatta in middue to lack of funds. It has not reApril nominated Mr Wamalwa as
ceived any money after the Treasury
slashed Sh3 billion allocated to the
Water and Irrigation secretary
National Irrigation Board (NIB) for
and Dr Juma as secretary to the
other programmes during the 2013/
Cabinet.
The selection committee, chaired
14 nancial year. NIB received Sh12
by National Assembly Speaker Jusbillion during the 2013/14 budgetary
allocation, before the amount was
tin Muturi, will meet this morning
reduced to Sh9 billion.
to scrutinise the suitability or otherwise of the appointment of Mr
The Administration and National Security commitWamalwa.
tee, chaired by Tiaty MP
If approved, he will
Asman Kamama will also
be making a return
If appoved, M vet Dr Juma who served
to the Cabinet after
serving as Justice and Wamalwa will be as principal secretary
in the Interior and CoConstitutional Aairs
making a etun to ordination of National
minister in the Grand
Coalition government the Cabinet afte Government ministry
between former Presi- seving as Justice before her appointment
dent Mwai Kibaki and
to the Cabinet.
ministe in the
Prime Minister Raila
Dr Juma, a career
Gand Coalition diplomat and former
Odinga.
Mr Wamalwa did not
university lecturer, regovenment
contest for any elective
placed Francis Kimemia
who stepped aside to allow the Ethseat in the March 4, 2013 General
ics and Anti-Corruption CommisElection.
The former MP, who resigned as
sion (EACC) to investigate corrupthe New Ford Kenya party leader, will
tion claims against him.
face MPs for the vetting at County
The Director of Public ProsecuHall at 10am. The Constitution mantions Keriako Tobiko later dropped
dates Parliament to vet presidential
the charges facing Mr Kimemia. The
nominees to the Cabinet as well as
DPP said the evidence provided by
their principal secretaries.
EACC was not enough to prosecute
Mr Kimemia, even though he is still
Mr Wamalwas appointment
being investigated over other corcomes at a time when the Jubilee
ruption claims.
administration is struggling to implement the one million-acre irriemutai@ke.nationmedia.com
BY EDWIN MUTAI

High Cout odes Gachokas elease fom jail

BY BRIAN WASUNA

The High Court has ordered the release of businessman Tony Gachoka,
who was last Friday sentenced to six
months in civil jail by principal magistrate Maisy Chesang for defying
her orders.
Justice Weldon Korir yesterday
ordered his release and stopped the
defamation case before Ms Chesang
until the matter before him is determined. The businessman and his
co-accused, Mr Je Koinange, led a
suit before the High Court challenging the legality of a defamation suit
in the lower court.
The two have been sued by tycoon
Jimmi Wanjigi for linking him to the
multi-billion shilling Anglo-Leasing
scandal in an episode of the Je Koinange Live talk-show.
Mr Gachoka spent the weekend in
jail after he failed to deposit a Sh2 mil-

East Africa
www.businessdailyafrica.com

Follow your favourite

stories online, plus more on
markets, industry, policy and
agribusiness
FIND US ON FACE BOOK & TWITTER

businessdailyafrica
BD_Africa

Tuesday

lion ne Ms Chesang had slapped on

him, Mr Koinange and the Standard
Group secretary Carol Cheruiyot for
failing to attend one of the defamation
suit hearings in person.
I suspend the Sh2 million ne issued to Mr Gachoka and order for his
immediate release. I also order for a
stay of the proceedings at the Chief

Jubilee AGM

Nairobi

Jubilee Holdings Limited chairman Nizar Juma (left) and Jubilee Insurance CEO Patrick Tumbo
address the media after the rms annual general meeting at the Sarova Stanley yesterday.

DIANA NGILA

Weekly Weather Forecast

Monday

Businessman Tony Gachoka when he

appeared in court in May .PAUL WAWERU

Magistrates court until this case is

heard and determined, Justice Korir
said.Mr Gachokas lawyers told the
court that his application challenging the legality of the defamation
suit would be overtaken by events
if he was left to serve the six-month
jail term.
Ms Chesang rst issued a warrant
of arrest against Mr Gachoka and Mr
Koinange on May 13 for disobeying
a court order and failing to honour
court summons.
She slapped the two with a fresh
ne after they failed to appear before
her last week.
Mr Koinanges lawyers told her
that the former CNN news anchor
had travelled to Ivory Coast to attend a conference.
Ms Chesang held that Mr Koinange should have attended to his legal
matters aairs rst before leaving the
country for the conference.

Wednesday

Thursday

Index to companies
Friday

Nairobi

Hi: 250C
Lo: 140C

Hi: 210C
Lo: 130C

Hi: 220C
Lo: 140C

Hi: 230C
Lo: 130C

Hi: 220C
Lo: 130C

Kampala

Hi: 260C
Lo: 150C

Hi: 250C
Lo: 120C

Hi: 250C
Lo: 120C

Hi: 260C
Lo: 140C

Hi: 260C
Lo: 130C

Dar-es-Salaam

Hi: 300C
Lo: 190C

Hi: 280C
Lo: 220C

Hi: 280C
Lo: 220C

Hi: 290C
Lo: 220C

Hi: 290C
Lo: 230C

Kigali

Hi: 250C
Lo: 160C

Hi: 270C
Lo: 120C

Hi: 270C
Lo: 130C

Hi: 270C
Lo: 140C

Hi: 270C
Lo: 140C

Bujumbura

Hi: 300C
Lo: 170C

Hi: 310C
Lo: 150C

Hi: 310C
Lo: 140C

Hi: 310C
Lo: 140C

Hi: 300C
Lo: 150C

This index of businesses mentioned in todays issue of the Business Daily is intended to
include all signicant references to companies.
E&Y.....................................1,4

Haco .................................... 4

NSE......................................19

CNN ...................................... 2

CBK....................................... 5

MBEA ..................................19

NIB........................................ 2

NCPB .................................... 6

Cytonn ................................19

Mumias Sugar ......................3

Green Pencil.......................15

Kestrel ............................... 20

Nema.....................................3

Blue Strategy......................16

Centum.............................. 20

Butali Sugar..........................3

MKU ....................................16

AfDB ................................... 20

Dubai Bank .......................... 4

BAT ......................................19

Deutsche Bank ...................21

Tuesday June 9, 2015 | BUSINESS DAILY

TOP NEWS
RADAR SCREEN

JOSEPH BARASA

Cane ush stis touble as suga secto tottes

PROBLEMS Industry

wracked by many
challenges, putting
many rms and
livelihoods at risk

enyas sugar industry is undeniably reeling from a myriad of

problems that are now threatening it with total collapse.
Most of the problems are deliberately plotted and executed by a section of the industry stakeholders, including managers and owners. At the
centre of this gloom is rampant and
gross abuse of the regulations that are
meant to streamline the sub-sectors
operations.
The end result is the sorry state of
the entire sub-sector even as a safeguards deadline by the Common Market for Eastern and Southern Africa
(Comesa) rapidly approaches. Worse
still there is no clear end in sight for the
sub-sectors many challenges, raising
the question as to whether the government will once again ask for another
extension of the safeguards.
Mumias Sugar, the countrys largest miller, remains on the throes of an
existential threat, becoming the latest
epitome of what ails the sector. Keen
followers of the Mumias saga will by
now have realised although it had serious management challenges, illegal
activities of some of its rivals bled the
company of billions of shillings in the
last four years speeding up its downward slide.
Yet these companies are continuing
with the illegal activities to the detriment of competitors and putting the
entire sugar industry in peril. Take
the rampant poaching of cane from
contracted farmers, for instance. In
the past four years this illegal activity
has continued to grow with impunity,
throwing the operations of many established millers up in the air.
Mumias Sugar, whose consump-

Tractors transport sugarcane at Kopere on the Eldoret-Chemelil Road in March. The sugar industry has been rocked by turf
wars as new companies lure contracted farmers away from established rms. FILE
tion of cane on a daily to annual basis
ing Butali Sugar court battles accusfar outstrips that of any sugar miller
ing it of setting up within the legal limit
of 40 square kilometers. Like Mumias,
or all of them combined, has been
Butali and Nzoia in the same neighthe biggest victim. Mumias is the
bourhoods have not
only miller with highbeen spared the cane
tech, modern diuser
poaching menace.
technology capable of
At the cente of
At the centre of
eciently processing
these battles is the
these battles is the fact
large chunks of cane.
that some of the new
Yet in the recent
fact that some of
players commenced
past, Mumias, which is
the new playes
operations without
located in Kakamega,
commenced
contracted cane farmhas been embroiled in
court battles with some
ers and have been
opeations
of its competitors, parwithout contacted operating purely on
ticularly the Kabrasad-hoc cane supplies
cane fames
based West Kenya
a practice that is in
Sugar Company whose
total contravention of
activities have extended
the law.
to neighbouring Busia.
The Sugar Act clearly stipulates
that every miller must be in an operaBusia farmers have for the past
three decades been contracted to Mutional zone of 40 square kilometers
mias, which is located 25 kilometres
in which it must contract sugarcane
away as opposed to West Kenya situfarmers to supply raw materials.
ated more than 100 kilometres away.
But on the contrary, a number of
West Kenya, which has no contractsugar millers have never contracted
ed farmers, has not spared neighbourfarmers to supply them with cane

and are therefore totally dependent

on poached cane.
In Kabras area of Kakamega, for
instance, the chaotic state of aairs
saw the entry of Butali Sugar in the
neighbourhood of West Kenya, and
immediately contracted farmers to
supply it with sugarcane.
The entry of Butali also raised questions as it did not adhere to the 40-km
radius rule. But that did not prevent
frustrated farmers from signing up to
supply the new miller who gave them
hope and support in sugar cane development.
One could ask where the former
Kenya Sugar Board [now the Sugar Directorate] was as all this happened.
This is because despite numerous
court orders that Mumias obtained
restraining West Kenya from buying
sugarcane from contracted farmers,
the activity continues with impunity.
Ironically, West Kenya went to the
same law courts that overturned the
earlier orders. The company then went
ahead to establish a sugarcane buying

centre at Olepito area on the Busia-Mumias road and within Mumias 40-km
operational zone.
That is not all. West Kenya is now
on course to constructing a sugar factory in the same location without a
license from the Agriculture, Fisheries, and Food Authority the sectors
regulatory body.
A letter from former interim head
of the Sugar Directorate Rose Mkok
dated April 8, 2015 indicated that West
Kenya has not been licensed to build
a sugar mill in Olepito.
The letter addressed to West Kenya
Company managing director Tajveer
S. Rai states that the sugar miller does
not even have authorisation from the
National Environment Management
Authority (Nema) which is considered
an important legal threshold.
Ms Mkok says the statutory requirements for the establishment of a sugar
milling plant are well known to Mr Rai
as an existing player in the industry.
The letter says that the directorate has
not at any time received an application
from the miller for construction of a
milling plant at the subject location
and neither is the directorate aware
of any approvals from Nema.
This state of aairs brings into
question the survival of sugar farming as a business in the entire western Kenya. Besides the turf wars,
other risks abound including trac
accidents with the increased number
of heavy trucks, tractors and lorries
operating within the localities.
This state of aairs also brings to
the fore the incident in Owino Uhuru
slums in Changamwe, Mombasa,
where hundreds of residents sought
medical help as a result of lead factory
poisoning.
It goes without saying that the
Comesa safeguards will be coming
to an end soon, which brings into
question the viability of Kenyas
sugar sector.
Barasa is a journalist and a media
consultant
jobarasa@gmail.com

Bitish ailines face multiple cabin ai pollution claims

Seventeen former and serving cabin crew are planning legal action
against British airlines saying they
have been poisoned by contaminated cabin air.
The cases are funded by the Unite
union which represents 20,000 ight
sta. Workers believe they have fallen
sick after breathing in fumes mixed
with engine oil and other toxic chemicals.
The Civil Aviation Authority (CAA)

says incidents of smoke or fumes on

planes are rare and there is no evidence of long-term health eects.
The Unite union, which is calling
for a public inquiry into contaminated
cabin air, has recently opened a dedicated legal unit to record and process
claims from its membership.
Its lawyers are now working on 17
denite individual personal injury
claims against British airlines in the
civil courts, although these are still

at an early stage. Uncensored safety

reports submitted to the CAA, and
obtained by the Victoria Derbyshire
programme, show that between April
2014 and May 2015 there were 251 separate incidents of fumes or smoke inside a large passenger jet operated by
a British airline.
The BBC has, where possible, chosen not to include cases which could
be blamed on an internal fault like a
broken toilet or air conditioning sys-

tem. The statistics do not include international airlines, such as Lufthansa

and Ryanair, even when travelling in
British airspace.
An illness was reported in 104 of
the 251 cases, and on at least 28 of
those ights oxygen was administered. The programme has also seen
rst-hand testimony from a pilot
working for a major UK airline who
believes he was aected by toxic fumes
while landing at Birmingham Airport

in 2014. Almost instantly myself and

the captain became very unwell and
decided it was bad enough to place
our oxygen masks on, he said.
We didnt declare a mayday mostly due to not being able to think
of the words needed to say - and ended
up auto-landing the plane and simply brieng, Whoever is alive or conscious, pull back the thrust levels after
touchdown. It was that serious.
- BBC

BUSINESS DAILY | Tuesday June 9, 2015

TOP NEWS

Mobile banking
dives accounts
suge fo lendes
From Page 1

companies such as Sa- Kenya] registered an increase in the

faricom, whose mobile banking product number of bank branches, indicatM-Shwari that is oered in partnership ing increased demand for nancial
with Commercial Bank of Africa has services, CBK says, adding that this
amassed 10 million customers.
was partly occasioned by increased
Other lenders, including Co-op Bank economic activities in the regions folhave developed own mobile banking lowing the introduction of devolved
products such as MCo-op, which has government in 2013.
1.2 million customers, representing half
The CBK says the latest banking jobs
its 2.6 million customer base.
boom is partly driven by ongoing expanTechnology has also become the sion into new markets such as Tanzafoundation of agency banking oered nia, Uganda and South Sudan where
by third parties for services
Kenyan banks have set up
such as deposits and withoperations or acquired exdrawals that are seamlessly
Thee have been isting institutions.
reected in customers acSubsidiaries of Kenyan
inceased cases banks in Rwanda, Tanzacounts.
In what amounts to a
of ICT-elated nia and Southern Sudan
stamp of condence in techopened a total of 27 new
fauds in the
nology-driven banking, the
branches last year or more
ecent yeas
CBK says Kenyas mobile,
than a quarter of the total
Internet and agency bank101 branches opened in
CENTRAL BANK OF KENYA
ing is underpinned by stathe year. A total of 74 new
REPORT
ble and ecient operating
branches were opened in
core banking systems that
Kenya, including 40 in
the lenders have installed in
Nairobi.
the past few years at a cost of billions
This raised the total number of bank
branches to 1,443, up from Sh1,342 in
of shillings.
While technology has reduced cus- 2013.
tomers reliance on brick-and-mortar
The CBK report shows that physibranches, the CBK found that the cal expansion of banks through wider
lenders remained focused on physical branch networks mainly beneted supexpansion, especially in Kenya where port sta such as messengers, janitors,
the establishment of county govern- receptionists and drivers whose ranks
ments has expanded opportunities at grew by the largest margin of 31.8 per
cent to 2,336.
the grassroots.
Those in supervisory roles, mainly
A total of 28 out of 47 counties [in

KCB staff attend to clients at the banks call centre at the Moi Avenue branch in Nairobi. FILE
overseeing clerical and back oce
work, were second with a 13.8 per cent
increase to 6,464.
Management, whose ranks grew
11.1 per cent to 9,584, also benetted
underlining the expanded domain of
the highly skilled professionals.
Clerical and secretarial jobs, which
form the bulk of banking sector careers,
expanded at the slowest rate of 3.1 per
cent to 18,539, reecting increased automation of their functions.
The report shows that banks hired
more risk managers as part of the plan
to deal with fraud associated with increased use of technology-based banking channels.
There have been increased cases
of ICT-related frauds in the recent
years, the CBK says, warning that the

new banking models are vulnerable to

fraudsters.
Data on fraud reported to Banking
Fraud and Investigation Department
(BFID) indicates that cases relating to
computer, mobile and Internet banking
are on the rise, the report says.
The lenders have also lost money to
plastic cash fraudsters, who use computer-based online transactions without eective preventive and detective
controls to steal cash.
But banks arent giving up on technology-driven products. The CBK report says most banks are keen to overcome the challenges associated with
technology-based services seen as the
surest way to reduce overall wage bills
in the long term.
Automation has also helped banks

increase their workers productivity, a

trend that is expected to deepen with
improved margins as the ultimate objective.
One worker served an average of 770
customers last year, up from 642 customers in 2013 as the growth in deposit
accounts surpassed the new hiring.
The industry has steadily improved
its eciency since 2007 when productivity was at a new low, with an employee serving an average of 190 customers
at the time.
The eciency gains have helped the
banks post signicant prot growth
over the years, with their combined
pre-tax earnings rising 12.2 per cent
last year to Sh141.1 billion.
vjuma@ke.nationmedia.com

Suvey eveals manipulation of nancial epots in Kenya

Companies manipulating results. Which, if any, of the
following have you heard of happening at your company in the last year.

SOURCE: EY FRAUD AND CORRUPTION REPORT

polling managers from

36 countries.
Over 150 respondents said that
misstating nancial performance can
be justied. Even more appear willing
to take actions that could result in nancial statement manipulation, the report
says, capturing the global footprint of
the problem.
This means Kenya was in good
company as far as nancial misconduct goes.
Globally, E & Y found manipulation
most rampant in Oman where 99 per
cent of executives admitted to one of
the three forms of nancial alterations
happening in their companies in the
past year.
India came in second with an armative response rate of 62 per cent, Saudi
Arabia (43 per cent), United Arab Emirates (40 per cent) while Turkey completed
the list of top ve with 34 per cent.
Egypt, placed sixth, was the rst
From Page 1

African country on the list with a score

of 32 per cent while Kenya ranked 11th
with 23 per cent ahead of South Africa
which polled at 22 per cent to take the
13th position in the list of 38 countries
surveyed. More than one in ve senior
management respondents were aware
of early recognition of revenue in their

company, was the reports verdict on the

global scale of the problem.
The same proportion had heard of
underreporting of costs in their company
within the past 12 months.
Besides admitting the existence of
prot manipulation, 90 per cent of Kenyan executives reported that bribery and

corrupt practices are prevalent in their

companies. A fth found oering gifts to
win business justiable while another 15
per cent said oering cash payments to
win business is reasonable and critical
to the survival of their rms.
These damning conclusions have
come in the wake of a series of nancial scandals in some of Kenyas largest
companies.
Nairobi-based Haco Tiger Brands was
last month accused by South Africas Tiger Brands, the majority shareholder, of
prot manipulation and pre-invoicing,
which inated the companys earnings
by Sh879.1 million.
Five top managers of the rm, which
is 49 per cent owned by businessman
Chris Kirubi, are said to have moved
stock to third party warehouses to make
it appear as if full year performance targets had been achieved.
The case has underlined the extent
to which some managers are willing to

go to earn their bonuses.

Three years ago, an audit into motor vehicle dealer CMC exposed how
the rms management and directors
signed misleading nancial statements
and allowed the company to adopt risky
business models that partly facilitated
the funneling of funds into o-shore
accounts, causing shareholders huge
losses.
Cement maker, East African Portland
Companys (EAPCC) majority shareholders the Treasury and the National Social Security Fund, in 2013 claimed that
the rms nancial statements had been
doctored, sparking a bare-knuckle ght
in the board.
More recently, nancial manipulation
has been alleged at sugar miller Mumias, Dubai Bank and family owned retail
chain Tuskys Supermarkets, painting a
gloomy picture of the state of corporate
governance in Kenya.
pmutegi@ke.nationmedia.com

Tuesday June 9, 2015 | BUSINESS DAILY

ECONOMY & POLITICS

NEWS I REVIEWS I ANALYSIS

Aveage home loan

soas to Sh7.5m,
locking out many
Sh124,701 repayment per
month for 10 years beyond the reach of many

Shilling loses
ahead of todays
MPC meeting

REAL ESTATE

to pay Sh124,701 per month and

Sh109,108 if the mortgage runs for 15
The average size of mortgages in- years. This makes it dicult for those
creased to Sh7.5 million, making it earning less than Sh300,000 monthly
dicult for a majority of Kenyans to to qualify for the average home loans,
own homes nanced by commercial given that banks demand that borrowers retain a third of the pay after all
banks.
The Central Bank of Kenya (CBK) deductions.
A CBK mortgage market survey in
data shows that the average home
loan rose from Sh6.9 million in 2013 December revealed that 22 per cent
and Sh6.4 million in 2012, a jump of the bankers interviewed cited the
high cost of houses as
blamed on high interest
the major impediment to
rates, expensive homes
mortgage uptake, with 21
and upfront fees.
Banks identied per cent of them blaming
Mortgage lending
high interest rates.
increased last year by
high cost of
Upfront costs such as
nearly a fth to Sh164
housing, high
legal fees, valuation fees
billion held in 22,013 acinteest ates,
and stamp duty were citcounts, up from 19,879 a
ed by 15 per cent of the
year earlier and 18,587
and high cost of
bankers as hurdles to acin 2012.
incidental cost
cessing mortgage.
Banks
identied
The cost of mortgage
high cost of housing/
CBK REPORT
has deed a new formuproperties, high interest rates, and high cost of incidental la introduced last June for banks to
cost as the major impediments to the use in pricing loans, seeking to bring
growth of their mortgage portfolios, down high interest rates that have stied lending to businesses and home
noted the CBK.
The average mortgage interest rate buyers.
stood at 15.8 per cent last year, down
Kenyan banks say their operating
from 16.37 per cent in 2013.
costs are higher than those in more
At 15.8 per cent, those borrowing advanced markets and that they lack
Sh7.5 million for 10 years will need a developed credit rating system for
BY KIARIE NJOROGE

Mortgage size (Sh m)

2010

4.1

2011

5.7

2012

6.4

2013

6.9

2014

7.5
SOURCE:CBK

screening customers.
Consumers accuse banks of taking too much prot by charging high
lending rates while oering lower deposit rates.
Under the new system, bank lending rates are linked to the Kenya Banks
Reference Rate (KBBR), which is based
on averages of the monetary policy rate
and the 91-day Treasury bill yield over
six months.
They are allowed to add a premium based on business costs, such as
electricity, and the borrowers credit
prole.
Most of the banks continue to nance only 90 per cent of the propertys cost. Some like Housing Finance
and KCB, however, introduced a 105
per cent nancing oer to help meet
the upfront costs.
The CBK report adds that the
amount in default stood at Sh10.8 billion as at December 2014 compared to

Houses in Kiserian, Nairobi. High cost

of houses has been cited as a major
impediment to mortgage uptake. FILE

Sh8.5 billion in 2013. Kenyas mortgage

debt to gross domestic product (GDP)
ratio stands at 3.5 per cent which is
much lower than in developing country peers such as South Africa (33 per
cent), India (six per cent) and Colombia
at seven per cent.
In Europe, the gure stands at
around 50 per cent, and it is over 70
per cent in Britain and the United
States.
The lack of aordable mortgage
products has seen most people opt to
pay cash for a house or buy land and
build homes over a period of time.
CBK has urged for a re-think of policies among them subsidising stamp
duty for rst-time home buyers and
development of infrastructure outside
the main urban centres.
Housing Finance continues to
be the biggest lender in the mortgages market with 5,840 accounts
worth Sh45.2 billion in outstanding
amounts.
KCB is second with a loan portfolio
of Sh41.3 billion despite having more
customers in its books5,914 than
Housing Finance.
gkiarie@ke.nationmedia.com

The shilling weakened yesterday a day

before the central bank holds its Monetary Policy Committee (MPC) meeting,
with the market expecting an interest
rate hike aimed at supporting the local currency.
The shilling was trading at 96.45/
65 to the dollar, compared with 96.00/
20 at Fridays close. The local currency
has lost 7.8 per cent to the dollar so
far this year.
John Njenga, a trader at Commercial Bank of Africa, said the shilling lost
ground due to a major telecommunications rm buying dollars earlier in
the day. (It was) buying dollars for a
big size, so thats the main reason what
pushed it up (weaker), he said.
The central bank is expected to raise
rates for the rst time in two years. A
Reuters poll of analysts showed most
expect rates to be hiked by 100 basis
points.
Renaissance Capital said in a market note the shilling is likely to remain
under pressure even if the rates rise 100
basis points, with weak dollar inows
and poor exports weighing on the local currency.
The shilling has been under pressure
from the global strength of the dollar,
a growing current account decit and
sliding foreign exchange earnings from
tourism as visitors have stayed away
due to a series of Islamist attacks. The
central bank sought to mop up Sh11 billion in excess liquidity from the market
yesterday.
Draining liquidity makes it more
costly for traders to bet against the
shilling.
-REUTERS

BUSINESS DAILY | Tuesday June 9, 2015

ECONOMY & POLITICS

Boad hitch denies Kenyans cheap ou

DELAY Failure to name food agency boss

stalls release of cheaper grain to markets

prices in tandem with the prevailing

market costs. NCPB is selling a 90Delay by President Uhuru Kenykilogramme bag at Sh2,800, which
is higher than the prevailing market
atta and the Treasury secretary in
price of Sh2,500.
appointing the directors of a food
We are at a crossroads with the
agency has stalled the release of
huge volumes that we are holding
cheaper maize to the market that
now as no decision regarding the
would ultimately lower the price
movement of stocks can be made in
of our.
the absence of the chairThe lack of directors
man and other members
at the newly established
of the new fund, said
Strategic Food Reserve
We ae at a
Newton Terer, NCPB
Trust Fund has seen the
National Cereals and cossoads with managing director.
The fund replaced the
Produce Board (NCPB) the huge volumes
strategic grain reserve
stuck with 4.3 million
that we ae
(SGR) whose memberbags of maize as millers
holding
ship comprised mainly of
and traders shun it over
principal secretaries. Its
high cost.
NEWTON TERER, NCPB
main brief was to ensure
The President is exMANAGING DIRECTOR
the country had enough
pected to appoint the
maize stocks.
chairman for the new
The SGR trustees
fund while the Treasury
would buy grain using taxpayers
secretary is expected to hire four
cash and release the maize stock to
other directors.
millers and those hit by food shortThe absence of the directors
ages.
means there is no authority that
The release of cheaper maize from
can direct the NCPB to lower maize
BY GERALD ANDAE

BY SANDRA CHAO-BLASTO

Lorries queue to deliver maize to the National Cereals and Produce Board depot
in Eldoret in January. FILE
the NCPB is expected to lower the
millers raw material costs and allow
them to reduce our prices.
Millers have opted for imports
from Tanzania and Uganda as well
as buying dwindling stocks held by
local farmers.
Mr Terer said the NCPB should
lower its maize prices to prompt an
uptake.
NCPB was in April directed to release 500,000 bags of maize to millers
to help drive down the high cost of
our that has persisted since January.
A two-kilogramme packet of the staple maize our is retailing at Sh103,
up from Sh92 in January.

NCPB has only managed to sell a

paltry 10,000 bags out of the intended
half a million 90-kilogramme bags.
Last year, it put up 500,000 bags
for sale but traders and millers declined to buy them, claiming that the
grains quality had deteriorated.
Mr Terer said the move will delay the purchase of grain from next
seasons crop in October as there is
no storage space for fresh consignments.
The 4.3 million bags of maize being held are both from last year and
the previous years harvests that the
board has been unable to sell.
gandae@ke.nationmedia.com

Vimal Shah appointed

univesity chancello
President Uhuru Kenyatta with renowned author Ngugi wa Thiongo (left) and
EAEP chairman Henry Chakava (centre) at State House, Nairobi, yesterday. PSCU

Come back and build Kenya,

Uhuu uges autho Ngugi
BY KIARIE NJOROGE

President Uhuru Kenyatta has urged

celebrated writer Ngugi wa Thiongo
to come back to Kenya saying that the
country needs his talents.
Prof Ngugi left the country for
Britain in 1982 following his harassment and imprisonment at the Kamiti
Maximum Security Prison over his
literary works.
This is not the Kenya of yesterday,
but it is a Kenya that needs all your
talents. It is time for you to come back
and help us build the country, said
Mr Kenyatta.
Prof Ngugi, who was last year
tipped for the 2014 Nobel prize in
Literature, said he was happy with
the changes going on in the country
and the democratic space in Kenyas
politics. He said that he had met sev-

eral government ocials in California, US where he lives, adding that

he had noted a changing attitude in
governance.
It is really a great feeling when you
feel your government is recognising
and acknowledging you, he said.
He spoke when he paid a courtesy
call to the President in State House accompanied by his three sons.
Among his great literary works
are Caitani Mutharabaini (Devil
on the Cross), Ngaahika Ndeenda (I
Will Marry When I Want) and Petals
of Blood. He is a professor of Comparative Literature and English at the University of California.
Prof Ngugi has been a great advocate of learning in local languages and
has urged the government to prohibit
teachers from punishing learners for
speaking in their mother tongues.

Foget PAC
chaiman post,
House Clek
tells Namwamba

Vimal Shah has been appointed the

chancellor of the Jaramogi Oginga
Odinga University, adding to the
list of the corporate leaders being
tapped to the world of academia.
President Uhuru Kenyatta appointed Mr Shah, the chief executive of Bidco, through the latest
gazette notice for a period of ve
years from May 19.
...Vimal Shah to be the Chancellor of Jaramogi Oginga Odinga
University of Science and Technology for a period of ve years, read
the notice.
The move is seen as an eort to
tap brains from the corporate world
to boost standards in Kenyas public universities that have been criticised for churning graduates that do
not meet employers needs.
A research conducted by an
American think-tank in 2013 revealed that graduates from Kenyan universities are less competitive in the job market, due to gaps
between their training and the skills
employers want.
Mr Shah, a renowned industrialists, joins other corporate gurus
such as the former Safaricom chief
executive ocer Michael Joseph in
the academia.

The National Assembly has told Ababu

Namwamba to forget his old job as Public Accounts Committee (PAC) chairman,
which he lost following graft allegations.
The Clerk of Parliament, through lawyer Wangechi Thanji, said in court documents yesterday that Mr Namwambas application ...has been overtaken by events
as a new chair of PAC has already been
nominated and taken up his duties and
as such this court will be engaging in an
academic exercise.
The Budalangi MP had on April 20
gone to court, seeking orders to reverse
the reconstitution of the dissolved committee.

Accused
He sued the Committee on Privileges, the
Clerk of the National Assembly and the
Attorney-General on grounds that the
committee did not have power to recommend the dissolution of another committee of Parliament or bar someone seeking
re-nomination.
Members of the watchdog committee
were replaced a day after Mr Namwamba
lled his case at the High Court.
Rarieda MP Nicholas Gumbo replaced Mr Namwamba as the new PAC
chairman.
Mr Namwamba was accused of receiving bribes from the then Interior and National Co-ordination PS Mutea Iringo to
alter recommendations of the committee
on a probe into Sh2.8 billion expenditure
during the 2013/14 nancial year.

Powers

Bidco chief executive Vimal Shah. FILE

Mr Kenyatta appointed Mr
Joseph as the chancellor of Maseno University last year.
Mr Shah, 54, will oer advice to
Jaramogi Oginga Odinga University, which was made an independent university in 2009.
He replaces Prof Jonathan ole
Karei who passed on last July.
Mr Shah is credited with turning
Bidco into a top player in manufacturer of household products such as
detergents, soaps and cooking oils
across East Africa.
The company turned over $500
million (Sh48 billion) in 2013.
Forbes placed the wealth of Bidco Oils Bhimji Depar ShahatVimal Shahs father at Sh67.2 billion
($700 million) last year.
-GERALD ANDAE

Mr Namwamba maintained his innocence and dared any member with proof
to tender the same before the Ethics and
Anti-Corruption Commission (EACC)
for action.
The membership of committees of
Parliament is a political question to be
determined by political parties and the
National Assembly in accordance with
House rules, this honourable court is not
the proper forum to determine such questions, Ms Thanji said.
She argued that the case violates the
principle of separation of powers within
the three arms of government by asking the
court to interfere in the internal management of Parliament and its committees.
She said that the court could only intervene in parliamentary matters if there
had been a constitutional violation jurisdiction.
The application seeks this court to
delve into the merits of the decision of
the Committee of Privileges of the National Assembly and therefore this court
ought to decline from sitting as an appellate court on the decision of a committee
of the National Assembly, she said.

Tuesday June 9, 2015 | BUSINESS DAILY

CORPORATE NEWS
NEWS I REVIEWS I ANALYSIS

Tanzania dives
Kenyan banks pot
as S.Sudan faltes
REPORT Regional units make combined

Sh5.5bn in net prot from Sh5.2bn in 2013

as they were not able to fully draw on
their South Sudan Pound-denomiTanzania has turned out to be a rich nated accounts after eeing back to
hunting ground for Kenyan banks with Kenya at the height of the crisis, says
subsidiaries in the neighbouring coun- the CBK report.
try outperforming South Sudan whose
Eleven Kenyan banks have subprot contribution to local lenders has sidiaries in the East African Commubeen hit by political instability in the nity (EAC) member states and South
young nation.
Sudan.
The Central Bank of Kenyas (CBK)
They are KCB, DTB, Commercial
annual supervisory report
Bank of Africa (CBA),
Bank of Africa (BOAK),
for 2014 shows that TanzaGuaranty Trust Bank,
nian subsidiaries outperSouth Sudan
formed operations in all
Equity Bank, I&M
other regional countries cisis led to a had Bank, Imperial Bank,
NIC Bank and the
such as Uganda, Rwanda
cuency shotage ABC,
Co-op Bank.
and South Sudan in terms
Subsidiaries operof protability, value of as- with discepancies
sets, total loans disbursed
ating in South Sudan
between ocial
and net value of deposits.
for 26.3
exchange ates and accounted
The subsidiaries regper cent of the total
istered combined prot black maket ates prots, although only
before tax of Sh5.5 billion
three banks, KCB, EqCENTRAL BANK
uity and Co-op have
compared to Sh5.2 billion
the previous year, with Tanoperations there.
zania accounting for 32 per cent of the
Uganda units accounted for 21.4 per
total earnings.
cent of the total prots. The number
The (South Sudan) crisis led to a of subsidiaries that registered losses
hard currency shortage with wide dis- reduced to four from the previous
crepancies between ocial exchange eight.
rates and black market exchange rates.
Two of the subsidiaries that regisSubsequently, this aected Kenyan cus- tered losses before tax were operating
tomers of subsidiaries in South Sudan in Uganda, indicating sti competition
BY OKUTTAH MARK

Fim wants
RVR wound
up ove debt

No of branches outside
Kenya
Banks
Equity
Diamond Trust Bank
KCB
Bank of Africa
I&M
Guaranty Trust Bank
Commercial Bank of Africa
NIC
Imperial
Coop Bank
TOTAL

No of
branches
62
59
58
56
25
25
12
7
4
2
315

BY SANDRA CHAO-BLASTO

SOURCE: CBK REPORT.

A KCB branch in Rwanda: South Sudan follows Tanzania closely in prots despite
the political instability that has hit the country since December 2013. FILE
though one of them had the subsidiary
set up in year 2013 and is, therefore,
still new to the market. The rest are
subsidiaries in Tanzania (one) and
Rwanda (one), says the CBK report.
The political crisis in South Sudan
began on December 15, 2013 with disagreements between two factions in the
ruling party that subsequently degenerated into an armed conict spreading to other parts of the country, especially the Northern states.
CBK says that as a mitigating measure, banks put up service desks in their
Nairobi branches of the parent institutions for the customers who were
evacuated from South Sudan as well
as in all the branches in the troubled
country for those who remained.
Despite the instability caused by
the strife, the operations of the banks
subsidiaries are ongoing. The only
exceptions are in Bor, Bentiu and
Malakal where the banks have closed
branches.
The subsidiaries had in their

books gross loans worth Sh189.3 billion against Sh149.6 billion the previous year. Tanzania accounted for 45.2
per cent of the total loans, Uganda
28.2 per cent while operations in
Rwanda accounted for 17.2 per cent
of the lending.
The subsidiaries had gross deposits worth Sh319.7 billion compared to
Sh236.5 billion in the previous year.
The lenders with operations in
Tanzania had the highest deposit
concentration and accounted for 33.7
per cent of the total deposits, South Sudans stood at 27.7 per cent while those
in Uganda accounted for 23.1 per cent
of the total deposits.
The subsidiaries had a total of
5,759 employees compared to 5,219
the previous year. Uganda had the
highest number of employees at 38.5
per cent in tandem with the number
of branches of the subsidiaries located
there.
mokuttah@ke.nationmedia.com

A security risk consultancy has led an

application at the High Court seeking
to wind up Rift Valley Railways.
CRS Risk Management Services
Limited has sued Rift Valley Railways over a debt arising from an alleged breach of contract.
The company is indebted to the petitioner in the sum of Sh10.9 million as
at January 6, with additional interest
being the amount due by the company
in respect of breach of contract, the
consultancy says in court lings.
The railway operator has not yet
responded to the suit. Justice Francis
Gikonyo ordered the rm to serve RVR
for a mention of the case on June 18.
RVR announced it had posted a
Sh1 billion loss in the year ended December. It made the loss despite having reported a 14 per cent increase in
revenue to Sh8 billion, indicating that
costs rose faster than turnover in absolute terms. The railway operator said
it was forced to reduce its charges
last year due to increased capacity
and competition from truckers who
took advantage of lower fuel prices to
drop their prices. According to court
documents, RVR appointed the rm
as its security risk management consultant in March 2013.
The rm was to oer security risk
management, process analysis and security manning services for one year.
The rm charged RVR a monthly fee
exclusive of VAT of Sh550,000 for
the security risk management and
Sh250,000 every month for the analysis in addition to separate charges for
other services,

CfC Stanbic loses top-tie bank classication to CBA

BY CHARLES MWANIKI

CfC Stanbic Bank has been downgraded

to the middle-tier group after dropping
its market share by 0.5 percentage points
to 4.92 per cent.
The bank, majority held by South African lender Standard Bank, is now ranked
seventh after swapping places with Commercial Bank of Africa which gained 0.72
percentage points to 5.12 per cent in a
year when it recorded rapid growth of
its retail customer base helped by the
M-Shwari platform.
These were the only two banks that
shifted between tiers in 2014 from their
positions in 2013.
Commercial Bank of Africa moved
to the large peer group from the medi-

um peer group while CfC Stanbic Bank

moved to the medium peer group from
the large peer group, said CBK in the report. The changes in the market share
were mainly occasioned by growth in customer deposits as banks deployed various
strategies for deposits mobilisation.
Kenyan banks are classied into three
tiers based on a weighted composite index of their net assets, capital and reserves, customer deposits, number of
loans and deposit accounts.
According to the Central Bank of
Kenya, there were six large banks controlling a market share of 49.9 per cent, 16
medium lenders commanding a market
share of 41.7 per cent and 21 small banks
with a market share of 8.4 per cent to the
period ended December 2014. Top tier

The CFC Stanbic

Bank branch along
Kimathi Street in
Nairobi. The bank
is now ranked seventh after swapping places with
Commercial Bank
of Africa. FILE

banks have a weighted index of ve per

cent and above, while middle-tier lenders have an index of between one and
ve per cent.
Those with less than one per cent are
classied as small-tier lenders. Banks in
the medium peer group increased their

combined market share from 37.95 per

cent in December 2013, coming at a time
when many of them raised additional
capital to meet new CBK requirements
as well as aggressively expanding their
operations.
The market share of banks in the large

and small tiers declined last year having

stood at 52.4 per cent and 9.66 per cent
respectively in December 2013. KCB remained at the top of the ranking with a
share of 12.69 per cent, followed by Cooperative Bank with 8.91 per cent and
Equity Bank with 8.7 per cent.
Cooperative overtook Equity, having
been third in 2013, courtesy of a gain of
0.3 percentage points while Equity shed
1.09 percentage points in the index.
The top tier banks hold 48.8 per cent
of the industrys total assets of Sh3.19 trillion, 49.6 per cent of the total customer
deposits of Sh2.29 trillion, 50.2 per cent
of the industrys capital and reserves of
Sh501.7 billion and accounted for 61 per
cent of pre-tax prots of Sh141 billion
recorded last year.

BUSINESS DAILY | Tuesday June 9, 2015

CORPORATE
NEWS
COUNTY BUSINESS
TECHNOLOGY Second exchange closed as it fails to attract users ve years after launch

Mombasa Intenet
tac e-outed
to Naiobi hub
BY OKUTTAH MARK

Internet trac to Mombasa and parts

of Tanzania will be routed through
Nairobi after the Amsterdam Internet Exchange (AMS-IX) and a Kenyan
telecoms lobby group closed Kenyas
second Internet Exchange Point (IXP)
that was based in Mombasa.
AMS-IX in a statement said the decision was made after the Mombasabased Internet exchange point failed
to attract enough users.
The second IXP in the country
was launched in 2010 to help route
all the regions trac locally. This was
expected to improve Internet users
experience, save operators the expense
of passing regional trac through Nairobi and reduce the costs associated
with trac exchange between Internet service providers (ISPs).
In its absence it means that region-

al operators will now have to pass their

trac via Nairobi. To date there have
been only four parties who have connected to the platform, said the AMSIX statement.

Minimise loss
The exchange point had attracted
international tech giant Google and
three local ISPs, but AMS-IX said it
is not economically viable to continue running the system with the
few clients.
In a statement on its website, AMSIX said it will re-use the equipment
which has been deployed in Kenya
for other purposes to minimise loss
of investment.
We (AMS-IX and Telecommunication Service Providers Association of
Kenya) believed strongly in the need
for a regional IX. However, since the
exchange point went live in mid-2014

Ecobank picks
Citibank boss
as goup CEO
BY EDWIN MBUTHIA

Internet trafc to Mombasa and parts of Tanzania will be routed through Nairobi.
FILE

it has proved dicult to attract parties to participate in the exchange.

This has led to the dicult decision
to close the East Africa Exchange Point
as of June 1st.
AMS, however, said the decision
shouldnt stall development of Internet infrastructure in East Africa.
It noted that there is a project
underway supported by the African Union to create an East Africa
exchange point. It is supported by
seven countries.
AMS-IX believes that this initiative is the best for the African market,
especially given that it will be owned
and driven entirely by African-based
parties enabling the community to
demonstrate that it is ready and ca-

pable to take the next steps in independently developing its own Internet
infrastructure, said the statement.
AMS-IX said it will continue to support the development of the Internet
infrastructure in Africa via initiatives
such as the African Peering and Interconnection Forum, sharing their
knowledge and experience, and the
provisioning of equipment to developing Internet exchanges.
Mombasa is the landing point for
all undersea bre cables to Kenya and
other landlocked countries in East Africa, a factor that made it an attractive
location for international carriers to
inter-connect with the region.
mokuttah@ke.nationmedia.com

Pan-African lender Ecobank has appointed a new group chief executive.

The bank with operations in 36
countries across the continent including Kenya, announced the appointment of Mr Ade Ayeyemi yesterday
eective from September 1.
Mr Albert Essien has been holding the position for about a year after
the former CEO was sacked following
leadership wrangles at the bank.
Mr Essien, who retires on June 30,
has been with the bank for 25 years
and was appointed Group CEO from
his position as the deputy CEO which
he held for two years.
Ecobank Group Chairman Emmanuel Ikazoboh said the recruitment involved a thorough and extensive search throughout Africa.
Ade is a truly outstanding individual with deep knowledge of banking
across Africa, and we welcome him to
the board, said Mr Ikazoboh.
Mr Ayeyemi has had a long career
with Citigroup, where he is currently
chief executive ocer of the lenders
sub-Saharan Africa division based in
Johannesburg.

Chase Bank takes up Sh4.5bn

of ovesubscibed bond issue
BY WAINAINA WAMBU

T0. Dal Natn ;1ll 43 Jun 18th 215 '9+l170 * 75.,1*l /.*896. 43
%#1&"1& 795.6 +6*3- *;*6- )133.67
T4 *-:.6817. 13 8017 59ll498 5l.*7. ,438*,8
07:<>6@ - >:?>64;57.94#;1>7<;:4371#2<: - $+&%*+, )-+
/1:4= - 81@?<.94#;1>7<;:4371#2<: - $+&' &&- ()(

The Chase Bank corporate

bond has attracted over Sh6
billion worth of subscriptions,
more than doubling the target
set for the rst tranche.
Chief executive Paul Njaga
yesterday said the bank will
take Sh4.5 billion and no
more subscriptions would
be accepted for the rst
tranche.
We were looking for Sh3
billion (for the rst tranche),
the bond was oversubscribed
and we got oers in excess of
Sh6 billion, said Mr Njaga in
an interview.
We cant accept any
more money, the plan is to
deploy what weve raised,
he added.
A clause in the corporate
bonds underwriting agreement allowed the bank as the
issuer to take up an additional
Sh2 billion if the initial Sh3
billion is oversubscribed.
The Sh10 billion corporate bond has a seven-year
tenure and is aimed at helping strengthen the banks

capital base and nancing

its expansion.

What it will take

Chief executive Paul Njaga
yesterday said the bank will take
Sh4.5 billion
Mr Njaga was speaking
after the signing of a public private partnership between Chase Bank, Rabo International Advisory Services
(RIAS) and the Netherlands
Ministry of Foreign Aairs.
The partnership will equip
Chase Bank sta with technical assistance to serve SMEs,
youth and women, agri-business and innovation.
Mr Njaga said the tech-

nical assistance would help

Chase bank achieve some
of the targets outlined in
the public-private-partnership deal.
Head of banking for Rabo
International Advisory Services (RIAS) David Gerbrands
said the two-year partnership
would ensure the transfer of
knowledge,
innovation,
agri-business and aim at
lowering the cost of banking
in Kenya.
The Chase Bank bond will
pay investors returns at a rate
of 13.1 per cent, the highest
yielding of several corporate
bonds issued over the past
two years.
The recent past has seen
an oversubscription of oers
for corporate bonds following
heavy demand.
The East African Breweries Limited (EABL) bond attracted over Sh9 billion, exceeding the Sh5 billion target
for the rst tranche.
UAP, CIC, Britam, NIC
and CBA are other rms that
have successfully raised funds
through the bond market.

Tuesday June 9, 2015 | BUSINESS DAILY

IDEAS & DEBATE

OPINIONS I REVIEWS I ANALYSI S

OPPORTUNITIES Banking system does not condone investment practices that hurt societies

Islamic nance gains gound with its

pinciples of inclusion, esouce-shaing

Other Voices
Alexis Tsipras
Greece Prime Minister

BY JAAFFER ABDULKADIR

With the ever increasing challenges of

inequality, unsustainable exploitation
of natural resources and unstable macroeconomic economic environment,
there is need to employ creativity and
innovation to address some of these
challenges. It is obvious that yesterdays solutions may not eectively address todays problems neither shall
todays solutions solve all of tomorrows challenges.
For humanity to be in harmonious
co-existence and limit the vulnerability to inequality, crime and insecurity,
there is need to enhance access to opportunities and facilitate the empowerment of the economic growth for the
majority. There is no signicance in
registering economic growth that does
not translate into the improvement
of quality of lives and the sharing of
prosperity.
Inequality kills dreams and adversely undermines the realisation
of the full potential of human beings.
How many potential engineers, doctors, architects, teachers, bankers and
business people have we lost and we
are still losing in their infancy or in
their prime age due to lack of opportunities for them?
Human greed over time has contributed to the accumulation of wealth
that does not help advance human development. It is the human greed that
also contributes to the creation of the
unstable macroeconomic environment which in turn erodes wealth
and destroys value through recession, ination and unpredictable exchange rates.
As a result of the above, there is
need to relook at our economic growth
and poverty reduction strategies in a
bid to rene the same to reect the
emerging realities of life and borrow global best practices economic
models .
The Islamic nancial and banking
practices which has a strong emphasis
and focus on real economic activities
and creation of values on the basis of
transparency , fairness and justice
is getting appreciated as a workable
solution to addressing some of the
omissions of economic and nancial
models in practice.
The functions and goals of the Islamic nancial and banking system
are similar to the systems under the
capitalistic structures with the only

Hugo Dixon (Reuters)

Athens creditors havent quite delivered an ultimatum. But the latest
bout of high-stakes diplomacy has left
Greece will little wiggle room if it wants
to avoid a messy default that unleashes
economic and political chaos. Alexis
Tsipras, the prime minister, has the
chance to go through one more round
of negotiations. If he plays his cards
well, he can secure less austerity from
the euro zone and the International
Monetary Fund, as well as an indication
that the countrys debt burden will be
relieved so long as it plays ball.

Irene Muloni
Uganda Energy minister

KCB Group chief executive ofcer Joshua Oigara speaks during the launch of the banks Islamic unit at the Hilton Hotel
in Nairobi in April. SALATON NJAU
dierence being in the qualitative apness that is detrimental to the overall
proaches stemming from the spiritual
wellbeing of the society is also prohibvalues, socio-economic justice and huited. The concerns for social and enman brotherhood.
vironmental stability supersede any
The Islamic nancing approach
considerations for economic returns
that operates on the principles of
in all its dealings.
social justice, inclusion and sharing
The institution of Riba (interest)
of resources between the rich and the
is totally outlawed and instead what
poor is fast gaining ground globally. It
is acceptable are productive activities
does not condone investment practices
that generate cash ows and create
that hurt the societies.
wealth such as returns from trading
processes or from the transfer of usuIndeed, as per the Islamic principles, prots are not deserved
fruct that entails the
unless value is derived from
to use an asset
Inequality kills right
the economic activity for the
for production with
benet of larger society. We
a provision for rentdeams and
do not have to make more
als due to the asset
undemines
money because someone
owner.
else is losing the same but
The Islamic the ealisation
nancial
system
everyone gains something
is based on a risk
in the process.
of the full
and prot and loss
The eorts of individupotential of
als to undertake activities
sharing principles.
geared towards their perThe Islamic transhuman beings
sonal economic wellbeing
actions are indeed
are encouraged as long as
similar to the equity-based transactions in rewarding
it is done within the framework of
performance with strong emphasis on
Islamic principles and the culture of
exploitation and fraudulent activities
rewarding eort rather than merely
is not encouraged.
the ownership of capital.
Islamic commercial jurisprudence
Investments in activities such as
arms trade, human tracking, drugs,
spells out rules and principles that
alcohol and any other form of busiplaces the Islamic law of contracts in

the heart of any exchanges and transactional processes .One key consideration in this principle is the contractual
certainty that limits ambiguities that
could breed disputes and bad blood
between parties concerned.
The Islamic nancial institutions
operate on the basis of robust governance framework that involves an extra
layer of oversight involving the Shariah
scholars who ensure that the shariah
tenets are adhered to.
The phenomenal growth of Islamic
nancial industry is attributed to its
ethical and moral considerations for
humanity. According to Ernst and
Young, the Islamic banking assets
have surpassed $778 billion in 2014
and projected to reach U$1.8 trillion
by 2019. Globally the Islamic banking
assets have grown at the annual rate of
17 per cent from 2009 to 2013.
Islamic banks have focused on businesses that are connected to the real
economy and partnerships that contribute to value creation. The growing
interest in Islamic nancial systems
and banking in general stems from
the need for nancial structures and
practices that oer an alternative to
conventional lending.
The writer is the head of Islamic banking at KCB.

Paul Bagabo(New Vision)

Ugandas Ministry of Energy and Mineral
Development has extended the deadline
for rms to submit bids in its rst-ever
round of licensing for six oil blocks in
the Albertine Graben. This is intended to
encourage companies to apply, after the
ministry received a disappointing collection of bids in the rst go-round. This
struggle to nd appropriate investors is
the latest consequence for the country
of the sharp fall in global oil prices.

Tony Blair
Former UK Prime Minister

Keith Kahn-Harris (Guardian)

The announcement that Tony Blair is to
join the European council on tolerance
and reconciliation as chairman seems
like an open invitation for satire . After
having reconciled Iraqis, Israelis and
Palestinians, Blair will now bring peace
to Europe. There is much about Blairs
post-prime ministerial career that is
jaw-dropping in its shameless self-delusion: he believes he can bring people
together in peace just as he believes he
can facilitate the spread of democracy
even as he works as a shill to dictators.

10

BUSINESS DAILY | Tuesday June 9, 2015

EDITORIAL & OPINION

Published by the Nation Media Group, Kimathi Street, Nairobi

Linus Gitahi: 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

Teasuy should suppot

gaduates hiing plan

wo years since he broached

the idea of giving subsidies to
rms that hire fresh graduates, Treasury secretary Henry
Rotich is yet to make public how
he intends to implement the proposal. Yet the employers who took
his word for a promise quickly began
to hire graduates and interns, hoping their gesture would be taken as
a sign of goodwill by a government
ghting to address the soaring rate
of unemployment.
Last week, the Federation of
Kenya Employers (FKE) broke its
silence over the matter when it publicly asked Mr Rotich to keep his side
of the bargain. In an economy where
nearly one million youths join the labour market each year from schools,
colleges and universities, the deal
between the Treasury and employers cannot get more urgent.
The fresh graduates need jobs but
they leave school without the skills
and experience that can guarantee
space in the overcrowded job markets. In short, somebody needs to
trust, hire, train and coach the young
graduates into tomorrows professionals. The State, on the other hand,
is better o with the energies of most
of the young people churned out by
the education system being put to
productive use.
A programme such as the one
that FKE discussed with Treasury
two years ago represents a good
start. It provides a glimmer of hope

to hundreds of students who leave

the education system each year that
the world around them may not be
hopeless after all. That is why we
take this early opportunity to ask
the Treasury to treat the youth hiring programme with the seriousness
that it deserves.
Granted, it takes some dose of
patriotism for rms to respond
positively to government initiatives
such as the youth empowerment
programme. But it also takes real
resources to get things done. Firms
that volunteer to mould the youth
have to spare resources to train them
over a long period of time without
expecting any direct benets over a
long period of time.
The FKE says rms that opt to
create space for young people to experiment at workplace usually incur
a lot of upfront expenses in the process. At the end of it all, the Treasury
still asks them to pay income taxes
at rates similar to those applied on
peers that have given the youth hiring programme a wide berth.
When Mr Rotich unveils his
third budget on Thursday, many
employers and youth alike will be
keen to see how dierently he chooses to treat the issue this time round.
As the originator of the whole plan,
he probably has the best approach
up his sleeves. Otherwise, for tax
purposes, he should consider treating the cost of keeping fresh graduates an allowable expense.

Scutinise pocess

ith the date of the reading of the Budget fast

approaching, there has
been increased scrutiny on the
budget-making process especially
now that the Constitution has put
Members of Parliament in charge
of the exercise.
And while MPs have the authority to re-allocate funds to various programmes, theres been a growing unease that the manner in which they
have been conducting the exercise
has been carried out with reckless
abandon.
Some could even read vindictiveness in a few decisions made in the
last one week where pronouncements of the settling of both real
and imagined scores were publicly
made by seasoned legislators who

should know better. One bright spot,

though. After identifying that Sh1 billion allocated to the Devolution ministry to cater for civil contingencies,
i.e., emergencies, was duplicating a
similar function in the Treasury, the
legislators re-allocated the money
towards the resettlement of internally displaced persons a project
with more readily identiable needs
and results.
With the entire budgeting process stretching over several months,
there must be more thorough scrutiny of allocations to prevent similar
missteps. This is not only to prevent
any misuse of such funds during the
next nancial year but more importantly to ensure that deserving programmes dont get short-changed
as a result of slapdash work.

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: bdfeedback@nation.co.ke

Just pull it out! Life is too short to remove USB device safely!

Five things that ae in my Budget wish list

JOSEPH THOGO
BUDGET

t is budget season in the East African

Community and it is at this time that
each of the partner state governments
table their estimated expenditure for the
coming scal year and, more importantly,
the tax measures that they propose to introduce to generate revenue to help fund
the envisaged expenditure.
Last week, Parliament approved the
governments Sh2.1 trillion spending plan
for the year 2015/2016. With citizens complaining about a heavy tax burden, the
EAC governments nd themselves between a rock and a hard place how to
increase tax revenue without negatively
impacting the ordinary citizen.
This therefore means that the head
honchos at the ministry of Finance have
to think outside the box and come up with
ecient and innovative ways of improving tax administration and increasing tax
revenue. Thus I thought to myself; if I had
an opportunity to give Treasury secretary
Henry Rotich the proverbial ve-minute
elevator speech, what would be the ve
things I would tell him?
First, do not kill the goose that lays the
golden egg. In the past couple of years,
the telecommunication industry, the
alcoholic and tobacco industry and recently the nancial sector have been on
the receiving end of legislative changes
aimed at increasing tax revenue. While the
intention might have been to increase tax
revenue, some of these changes have been
counterproductive and have resulted in
loss of business and, consequently, loss
of revenue.
Some of these changes appear to have
been introduced without adequate consideration of their impact on businesses

and consumers, and the government has

had to revise its position after the negative
impact has been felt.
Secondly, there is need to come up with
new and innovative measures of generating tax revenue which do not necessarily
target these low-hanging fruits. Consider
introducing anti-deferral rules to widen
the tax bracket. The tax law of many countries does not tax shareholders until they
have dividend distribution. It is therefore
common for companies to form foreign
subsidiaries in jurisdictions with lower tax
rates and defer portable income.
Local tax on this income is avoided
until the lower tax jurisdiction pays a
dividend to its shareholder. This income
could be avoided indenitely by loaning
the earnings to the shareholder without
actually declaring a dividend. The antideferral rules would seek to prevent (or
negate the tax advantage from) deferring
income in jurisdictions that have a preferential tax regime for passive income and
income that is split o from the activities that produced the value in the goods
or services generating the income. The
rules would require a Kenyan entity to
include in his Kenyan income as investment income and passive income as well
as sales and services income in those jurisdictions.
Thirdly, consider reviewing the newly
introduced anti-treaty shopping rules. In
Kenya, the Income Tax Act was amended
to restrict the application of benets of a
double tax treaty where 50 per cent of the
underlying ownership of the entity resident in the oshore country is owned by
shareholders who are not resident in the
oshore state.
While the objective appeared to be
a move to prevent treaty shopping, the
result is a purported unilateral amendment by Kenya of all its double tax treaties, which ironically comes at a time
when Kenya has concluded and ratied
a couple of treaties, and it does not take
into account the impossible task of determining the underlying shareholders

VIEWS FROM ABROAD

of the oshore entity. To avoid taxpayers

tripping over these rules or potential litigation, these rules should rened.
Fourthly, thank you for the Tax Appeals
Tribunal. Even though it took a couple
of years, the tribunal is now constituted
and should be up and running soon. One
commendable thing is its constitution;
the Treasury secretary was able to identify
and appoint a good mix of people from
dierent career backgrounds in law, business, nance, economics and insurance
to the tribunal.
It is the taxpayers hope that the tribunals members invaluable experience
from working in consultancies and at the
KRA will be a valuable asset whenever
they are seized with a litigious tax matter for adjudication. However, one would
hope that the tribunal would have its own
budget and secretariat to ensure eciency
and independence.
Finally, employ a consultative approach to tax administration measures.
The government anticipated to collect Sh7
billion between January 2015 and June
2015 from capital gains tax. However,
with about Sh300 million in the pocket
so far and with a case still working its way
through the court system, the forecast
does not look promising.
At the moment everyone is losing (except maybe the lawyers) and with a Sh6.8
billion hole to plug, it is looking especially
bad for KRA who seem to have hardened
their position. If KRA hopes to employ this
my-way-or-the-highway approach for the
anticipated new income tax legislation,
then the taxman will be preoccupied in
the court corridors instead of collecting
much need revenue. Compliance is higher
when taxpayers attitude is positive as opposed to when they feel they are shouldering an unnecessary burden.
Mr Thogo works with Deloitte
East Africa and can be reached at
jthogo@deloitte.com. The views expressed above are his own do not necessarily represent those of the rm

Opinions fom aound the wold

Step up cancer screening

Securities agency on right track

Resuscitate health sector

On Sunday Rwanda observed the annual National

Cancer Survivors Day. Breast cancer is one of the
most common cancers diagnosed in Rwanda, and
THE NEW TIMES
it has been reported
KIGALI
that most sufferers seek
medical attention when its late. Make available
equal access to detection services, treatment, and
care, including palliative care.

Mary JO White, the chair the Securities and

Exchange Commission, is a rarity in Washington.
Its work is bound to displease at least someone.
What we can expect
WASHINGTON POST
WASHINGTON DC from the agency is a
genuinely independent process as Ms White said.
We see no evidence that she has failed to deliver
and much evidence she was right to declare it.

Ugandas health sector has challenges, including

difficulty in accessing health care, and rundown
facilities. While specific steps have been taken
DAILY MONITOR
to address some of
KAMPALA
the issues, such as the
national crackdown on fake clinics/drug stores, the
bigger outlook is far from satisfactory. Address key
issues like insufficient health infrastructure.

Tuesday June 9, 2015 | BUSINESS DAILY

11

EDITORIAL & OPINION

Cowds moe dangeous than ECB in bond maket

SWAHA PATTANAIK
BONDS

ario Draghi is relaxed

about the excitement in
the bond market. The
European Central Bank president
simply says higher volatility is here
to stay. His press conference comment helped stoke a sharp increase
in euro zone sovereign bond yields
on Wednesday. But he was only stating the obvious. These days, the real
hazard for bond investors is being
part of too big a herd.
The latest bout of volatility actually started on Tuesday. In two days,

the yield on 10-year German debt

climbed 36 basis points, the biggest
rise in that short a time since 1998.
The rise for comparable Italian and
Spanish yields was 24 and 20 basis
points respectively. But bond volatility is hardly exclusive to the euro
zone. On May 11, 10-year US bonds
rose by 13 basis points, almost twothirds more than Italian or Spanish
ones climbed that day.
A positive euro zone ination
reading and the prospect of a rate
increase from the US Federal Reserve may perhaps explain some of
the sharp movements. But such developments cannot justify the scale

Letters

of moves in assets which used to be

safe and stolid.
The gyrations are mainly an inevitable consequence of herd behaviour. Too many investors ploughed
too much money into such bonds
for too long. Yields fell so low that
investors had little or no cushion
against losses. They became jittery
and would try to bail out at even
the tiniest provocation. But the
groupthink has made the trade so
crowded that the market is prone
to stampedes and far from tiny
movements.
Volatility breeds more volatility.
Scarred by the brutal moves, inves-

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 bdfeedback@ke.nationmedia.com

Why we need a childrens welfare fund

ounty governors have

been agitating for additional funding which they
are justied to get from the central government. In that case, we
need to view the Constituency Development Fund (CDF) as an opportunity to address the serious
problem of child poverty.
We can do this by turning the
CDF into a children and families fund, which could provide a
measure of welfare relief to families which are providing care to
children.
Most families are today living in
poverty, meaning that the children
they are taking care of do not enjoy adequate basic things like food,
clothes, shoes, not to mention other
necessary things like beddings and
water that families with a regular
income take for granted.
There are many families with
children who live in excruciating
poverty, even as our politicians play
blind and deaf and view people as
statistics and numbers to sustain
or propel them to power after winning elections.
Children below 18 years make
up 52 per cent of Kenyas 45 million people, translating to about 23
million children. It is possible that
up to one-third to one-half of this

tors are less and less willing to ride

out each new setback, let alone to
buy as prices fall. The herd becomes
twitchier.
And its not just psychology.
The common investment strategy
of trying to limit the chance of losses
pushes up volatility. Thats because
the way they keep this probability
roughly constant is by selling when
bond swings have become more amplied.
In this environment, there is
more danger than safety in numbers.
The author is a Reuters Breakingviews columnist

Stop this
wastage of
resources on
city highway

A woman carrying a child jumps over raw sewage in a slum. FILE

number are children in need. This
means they will not able to meet
their developmental milestones,
including education, without state
intervention in their lives.
It is possible that the CDF and
county governments have been
meeting school fees for a tiny
fraction of those struggling to pay
the same in schools.
There has been much reporting in recent months in our press
about children aicted by jiggers,
homelessness, forced labour, early
marriage, begging, abandonment,
tracking and even being sold in
the black market. I was recently really moved to read of a one-monthold baby aicted by jiggers in Siaya

and to see many children begging

in the centre of Nairobi, Mombasa
and Kisumu.
We know they do not beg for
fun, as they should be in school, but
for food to survive as their families
do not have the money to provide
for basic items.
But we appear to have closed
our minds to their fate.
The CDF will not make us any
poorer if we turn it into a fund to
alleviate child poverty in our most
needy families. The new fund
would need to be professionally
managed and needless politics
kept out, of course.
GITHAE MUIRURI, London

f a transparent audit is carried out, the stretch of road

along Uhuru Highway between both Bunyala and Lusaka
road roundabouts has certainly
gotten the most makeovers over
the past few years.
Initially there were ower
beds in patches, which were
then dug up and replaced with
the infamous pebble mosaics.
The pebbles were later removed, the patch dug up and
ower beds planted.
The ower beds were later
replaced with grass lawns which
are now in the process of being
dug up to be replaced with whoknows-what. The same stretch
is also where city authorities
recently placed 20-litre drums
lled with mortar, ostensibly to
control trac.
Needless to mention, all this
landscaping comes at a huge cost
to rate payers unless it is the city
governments eorts in creating
employment.
TOM LEPSKI OCHOLA
Nairobi

Technocrats should address trafc gridlock immediately

here is need to expand Ngong

Road, all the way from the
City Mortuary roundabout
to Ngong town. It needs to be made
a dual carriageway urgently.
The same applies to Magadi
Road from Galleria to Kiserian. I

dont understand what all the technocrats in the ministries concerned

do all year round.
We may have grand railways and
airports, but the cities and towns
are in a gridlock everyday. Why cant
we have leaders who plan 50 to 100

years ahead instead of the usual ve

to ten years?
Stress associated with sitting in
trac jams for hours daily may be
responsible for a number of social,
physical and mental problems common in this country today.

Someone needs to conduct

some research, but for now, poor,
inadequate and lack of roads in the
country is sapping strength out of
hard working Kenyans.
CHRISTOPHER KIBIWOTT
Nairobi

Maket makes,
shot selling
build liquidity
at the bouse
GEOFFREY ODUNDO
TRADING

he Nairobi Securities Exchange (NSE)

is working with various stakeholders to
develop a comprehensive framework
and requisite regulations to enable market
makers, short sellers and stock lenders to operate in the domestic capital market. To some
Kenyans market making and short selling
may sound slightly ominous and manipulative terms. But these are common in many
global exchanges and are an important tool
for building liquidity the numbers of shares
being traded in a market.
Liquidity is the lifeblood of any exchange;
it is the ease with which shares can be bought
and sold and is critical for buoyant secondary
trading. Some smaller exchanges can suer
from a lack of liquidity as NSE has on some
occasions. Investors want to be able to trade
when they choose. Listed companies, on their
part, are always looking for liquidity in their
own stock, as it tends to lead to a fair marketdriven valuation. An investor on the biggest
exchanges London, New York or Hong Kong
would take for granted that they could trade
in a stock at a moments notice. For this to occur as it does in these jurisdictions there must
be someone buying or selling at the other end
of that transaction.
In those bourses, market makers and stock
lenders play an absolutely vital role in ensuring
that tradable stock is available at any time of
the trading day. In smaller markets, like NSE,
if you want to buy equities or bonds, your broker needs to nd a willing seller and vice versa.
And from my broking experience, I know it
is very dicult to nd a buyer or seller for exactly the same value, in the same company, at
exactly the same time as you are.
This is where a market maker comes in.
These are rms, who meet stringent capital
and operational requirements, which are obligated to provide a two-way price in certain securities in order to ensure that there is always
a certain amount of liquidity in these stocks.
This means that investors on NSE always have
the opportunity to buy or sell.
And it also means that the market can be
more sensitive to the performance of, and
announcements by, companies listed on the
exchange. For a market maker to operate effectively, it must have the ability to engage in
short selling. The rm will need the ability
to sell short in order to meet its obligations
(i.e. to sell stock which they do not currently
have to buyers). This shortfall is covered before settlement from later purchases or from
stock borrowing.
In order for the market makers to be able
to borrow stock, so as to do their crucial job,
a stock lending and borrowing framework
needs to be put in place. Other traders who
need to meet unexpected delivery shortfalls
or run a short selling operation can also use
this service.
Mr Odundo is the CEO, Nairobi Securities
Exchange

12

BUSINESS DAILY | Tuesday June 9, 2015

BUDGET

NEWS INDEPTH

2015-2016

TOURISM
Tourism Earnings
2010-2014 (Bn Sh)

97.9

Earnings have dropped

over the years as tourist stay away following
the travel advisories
and terror attacks.

96

94

87.1

73.7

Kenya must win

wa on gaft to
gow tax evenue
Illicit outow of cash kills morale of
Kenyans and denies them access to crucial services
CORRUPTION

SOURCE: SOURCE: ECONOMIC SURVEY 2015

What it will take to lift

batteed touism secto
These measures encouraged companies to pay vacation expenses for sta to
Nearly one year ago, about 23 hotels in
go for holidays and deduct such expenditures from their taxes while exempting
the coastal region closed down over inair ticketing services supplied by travel
security and Ebola outbreak.
Once Kenyas leading foreign exchange
agents from paying value added tax.
earner, tourism has been outpaced by tea
Park fees were reduced for both resiowing to challenges such as insecurity,
dents and non-residents. Further, the
government directed that all outstanding
poor infrastructure, increasing poachincome tax-related refunds owed to the
ing, political instability and most recently the outbreak of Ebola in West
tourism industry players be paid out by
African countries.
the Kenya Revenue Authority (KRA).
The Kenya National Bureau of StatisNotably, implementing some of the
tics (KNBS) Economic Survey 2015 rementioned strategies require legal backing, yet to be formulated. Further, techported a 7.3 per cent decline in tourism
nocrats have questioned KRAs ability
earnings in 2014 to Sh87.1 billion from
to issue refunds given
Sh94 billion in 2013 while
challenges in collectthe number of international visitors contracted by 11.1
ing revenues in the
per cent to 1.52 million from
rst place.
1.35 million during the same
Successfully impleAmount of money tourism menting
period.
such measures
requires more than just
The government pro- sector generated
rush decisions. It calls
posed measures aimed at
bolstering the sector, most
for careful assessment
of which may fall short their
of the ability of key players to implement the directives. Whilst
intended goals and here is why.
First, in the 2015/16 budget estimates,
the impact of these measures are yet to be
the Treasury has signicantly increased
felt, more questions remain unanswered
its allocation to tourism, a move expected
such as KRAs ability to pay refunds.
to positively impact the battered sector.
Finally, tourism sector players suggest
Ironically, in early May 2015, the Momthat the root cause of our woes lie in lack
basa County proposed a paltry budgetof condence by both local and internaary allocation of Sh106 million (including
tional markets. With regards to this, the
Sh41 million development expenditure)
government, in the 2015/16 budget estifor tourism out of a total of Sh10.7 billion
mates, plans to increase allocation to the
budget. The allocation was seen as a drop
military and the police by 14 per cent.
in the ocean for a struggling sector.
Evidently, with the growing budgetary
allocation to security, crime and terrorThese varied commitment levels
ism-related attacks have also increased.
suggests a need for both the national
Government remains hard pressed to jusand county governments to align their
tify the increased allocation without tangoals and unlock synergies by working
gible benets to the security situation.
together. Eorts can be centralised and
It is evident that eorts are being made
the sector managed eectively when a
to improve the sector. Reaping these benholistic budgetary process is adopted
ets calls for commitment, accountability
especially in marketing and product
and creation of a legal backing to support
diversication.
Following a spate of terrorism attacks
proposed measures, so that the tourism
in the country, the government in May
industry can compete with the likes of
Egypt, South Africa, Rwanda and Tanza2014 introduced measures and incennia for the international tourism dollar
tives to encourage domestic tourism.
from overseas destinations.
This was after travel advisories were issued by Western countries such as the
Mr Kanani is a consultant at Deloitte
US, Britain and Australia.
East Africa
BY EZRA KANANI

Sh87.1bn

BY IBRAHIM KHALIF

Kenya has announced a Sh2.17 trillion

expenditure plan for the 2015/2016 scal
year. The natural question that arises is
how would this expenditure be funded? The
public expenditure has largely been funded
through tax revenue and borrowings. In the
past decade, the shift towards tax revenue
playing a signicant role in nancing public
expenditure has been remarkable.
This is partly attributed to the regime
change in 2002 as well as economic development over the past decade, not to underestimate the eect of time value of money.
The tax modernisation programme undertaken by the Kenya Revenue Authority, combined with the clarion call coined
around the same time of, Tulipe Ushuru,
Tulinde Uhuru and Tulipe Ushuru, Tujitegemee rallied taxpayers to take up their
role and contributed to enhancing revenue
collection.
Furthermore, the tax authority involved leaders at the highest level, with
the president reinforcing the message of
compliance.
Annual awards for the top taxpayers
also became a source of pride for the companies that were feted. However, there is

still more to be done to achieve optimum

levels of tax compliance due to a variety of
reasons, including the need to win public
condence in regard to how the collections
are utilised.
Tax revenue, whose collection is the mandate of the Kenya Revenue Authority, is one
part of the public nance equation with the
other equally important part being public
expenditure. Based on the numerous reports of misappropriation of public funds,
one would be forgiven if he or she concludes
that tax revenue is free money.

Kenya Revenue
Authority (KRA)
Commissioner
General John
Njiraini . FILE

Accountability
How else would one explain the lack of accountability that often characterises public
spending? The dire situation with regard to
misuse of taxpayers money has seemingly
been acknowledged by the president in his
Executive Order No. 6 of 6 March 2015 titled Ethics and Integrity in the Public
Service.
The four-page order, which is addressed
to the accounting ocers in the executive
arm of the government has two parts. The
rst part sets out the problem while the second charts the way forward.
This order appears to be the boldest move
in the attempt to confront corruption and

Will evised income tax

stuctue be convenient?
BY ILYAS KHAN

It is often said that nothing is certain, but

death and taxes. Ironically though, taxation
is not always that certain. If you ask any investors, for the top things they look for when it
comes to taxes, certainty (whether they will
have to pay tax and if so, how much) is bound
to be on the list.
Taxation is necessary because it is often the
primary means through which the government collects resources needed to run programmes that benet the population.
Services, such as national defence and
public administration, cannot easily be sold
to individuals.
This is because if these services are provided, the benets are available to all, irrespective of whether or not they pay taxes,
and one persons enjoyment of them does

not diminish the benets available to others. Similarly, it would not be acceptable to
provide certain services, such as healthcare,
education and police protection only to those
who are able to pay full costs because, then,
it would deprive the poor of basic socio-economic rights, which are now enshrined in
our Constitution.
The reason why there should be certainty
in taxation is two-fold. First, uncertainty may
result into unfair or unintended burden being
placed on the taxpayers by KRA, based on its
interpretation of unclear provisions.
Secondly, uncertainty fuels tax evasion.
The time, the manner of payment and the
amount to be paid must be clear to the taxpayer. Thus, tax legislation should not be
ambiguous in relation to ascertaining what,
when and where tax is to be paid.
Kenyans have become litigious over the

Models on a mock
queue along Mombasa Road demonstrate the frustration
of queuing while lling tax returns at KRA.
KRA is pushing for onlinetax ling.
SALATON NAJU

BUDGET
2015-2016

Tuesday June 9, 2015 | BUSINESS DAILY

NEWS INDEPTH

The oigins
of tax tems
that we use
BY ROBERT WARUIRU

hopefully slay it. Even though the whole order

is strongly worded, two paragraphs, one of
which is related to the subject of this article,
caught my attention. It says, these practices
(read unethical practices) are unacceptable.
We cannot allow the hard work and sacrices (emphasis mine) of many Kenyans to be
undermined by a few individuals driven by
sheer greed (emphasis mine). I am, therefore,
determined that this vice must end.
Talking of hard work and sacrice, any
conscientious person would think twice when
tempted to misuse public resources if he or she
appreciates how tax revenue is pooled.
A signicant part of the tax revenue comes
from Kenyans, who individually may not earn
or spend much, but play an important role
due to their large numbers.
Based on the 2015 Economic Survey, the
estimated real average wage earnings per annum per employee for both public and public
sector for 2014 was Sh370,340, showing that
the majority of the people are in the 10 per
cent to 25 per cent tax band.

last decade or so. The number of tax disputes

as well as the complexity of issues and amounts
at stake continue to increase. There are many
reasons for this, including challenging interpretations of tax laws; inconsistencies in the text
of legal and procedural guidelines; absence (or
limited instances) of correlation between court
rulings and actions of tax authorities etc.
The structure of the current taxes become
dicult for taxpayers due to frequent changes in tax legislation, some of which are not
in harmony with other provisions, as well as
changes in nature of transactions that may
not have been anticipated at the time the tax

The importance of this category of taxpayers came into the limelight when in 2013, a
Member of Parliament proposed an amendment to the Finance Bill for the year, to exempt
all those whose income is below the top rate
of 30 per cent, which is reached at a monthly
salary of Sh38,892.
The proposal was rejected by the Budget
and Appropriation Committee due to the
huge hole it would have created in the governments coers.
Tax revenue is the sweat of the regular police ocer who risks his or her life working in
the hardship and high risk areas or the trac
police ocer who braves the scorching sun or
torrential rains to ease trac snarl ups.
It is the sacrice of the nurse on night
duty attending to the patients in hospitals.
Tax revenue comes from eorts of the lowly
paid teacher with whom we have entrusted
our children or junior public servant from
whom we seek public service all of who can
barely make ends meet.
It comes through the eorts of the Indus-

legislation was put in place. The government

is attempting to simplify the tax regime, beginning with the new value added tax (VAT) Act
in October 2013. The Treasury Secretary in his
Budget speeches for 2013 and 2014 expressed
the intention to have the other tax legislations;
the Income Tax and Custom & Excise legislation, reviewed.
Kenyas Income Tax Act is almost 40 years
old and has been amended countless times to
keep it abreast of developments in commerce,
to create new mechanisms for increasing the
tax base and to close loopholes. Inevitably, this
has become more complex thus increasing uncertainty for the taxpayer.
The Income Tax Act should be given a fresh
rewrite, as has been done with the VAT Act.
Whilst revised and clearer legislation will be
welcomed by all, it is however, inescapable that
there will always be areas of tax law that are
subject to dierent interpretations.
However, if the major objectives of taxation are to be achieved, the writers of the
new/revised tax legislation should ensure they
achieve simplicity, convenience and equality.
This is important as it helps to ensure taxpayers

trial Area factory workers who trek from far

o slums to make a living. It is money paid by
the long distance truck driver who sits behind
the wheel of a truck for hours driving from
one end of Kenya to the other, before crossing
into the neighbouring countries.
And not to forget all the entrepreneurs who
have put in a lot of sweat capital and taken
the risk to build their businesses.
Therefore, those charged with the responsibility of managing public revenues ought to
ensure that the tax-paying public get value for
their money, bearing in mind that they have
sacriced a signicant part of their earnings
to contribute to the public coers.
In conclusion, I pose this question to the
crooked public ocial or the unscrupulous
supplier are your conscience not pricked
when you squander the hard-earned tax
revenue raised by the citizenry, including
yourselves?
Mr Khalif is a senior tax manager, Deloitte
East Africa

fully understand their obligations and minimises the risk of default as well as possible unfair
enforcement by the revenue authority.
The criteria of convenience stresses that
both time and manner in which payments are
executed should be convenient to the taxpayer.
For instance, the payment of VAT and excise
duty by the shopper is very convenient because
one pays the tax when he buys the commodities, at the time when he has the means to buy
the product.
Taxes should be allocated among individuals fairly and reasonably (and thus equitably).
Every person should pay tax according to his
ability which is dictated by the income levels.
This means that a taxpayer should not pay tax at
the same rate; but rather every taxpayer should
pay the tax proportionate to his income.
Following the promises of 2013 and 2014, we
are hopeful that we will see the actual tabling
of a revised Income Tax Act during the Budget
Speech of 2015 and it is hoped that any such
revised legislation will conform to the basic
criteria mention above.
Khan is a senior manager, Deloitte East
Africa . E-mail: iikhan@deloitte.com

13

So, we all know that death and taxes are the two certain things. As to which you prefer, I am not sure.
What I am sure of is that tax is the price that we pay
for living in a civilised society.
It is through our taxes that we as citizens nance
the government and the social amenities it provides
its citizens. Tax, therefore, goes to the very existence
of a state and it is no wonder that most countries,
Kenya included, are now including specic tax or
taxing provisions in their constitutions.
In medieval England, taxes were levied and collected in the name of the King or Queen as the sovereign. Customs, which we know today as the tax
or duty that we pay when we import taxable goods,
was levied by the King on the produce that the citizens reaped from tilling land.
At the time, the nobility owned all land and the
tenants were required to not only pay the landlords
for use of the land, but also pay the King a portion
of the produce as was customary.
It, therefore, became the duty of every person to
pay the King a portion of what one produced. What
we pay today is still customs as a duty to the State,
hence the name customs duty.
Value added tax, which is increasingly becoming
the method of choice for governments world over to
raise tax revenues is predicated on the principle of
value addition. For example, if I bought wheat from a
farmer and baked bread to sell, I have, by processing
the wheat to bread, added value to the wheat and this
value ought to be taxed. The tax so levied is referred
to as value added tax. However, in todays commercial setting, it is dicult to identify the value added,
especially for services such as Internet.
Excise duty, which is perhaps better known as sin
tax is drawn from the act of excising or cutting away
something that is not useful. In the olden days, excise
duty was levied to remove harmful goods away from
the public, making these goods much more expensive
for the public to purchase or consume. Excise duty
was used to curtail sinful consumption by levying
excise duty on these goods. The main culprits of excise duty today are alcohol and cigarettes.
Despite the noble origins of excise duty, most governments have identied excise duty as an avenue of
raising additional taxes in a cost-ecient manner.
This has seen governments levying excise duty on
motor vehicles, possibly to limit the congestion and
environmental pollution; processed drinks to safeguard public health; perfumes and cosmetics to tax
these luxuries which are considered vain; and, quite
interestingly, airtime and now services provided by
banks and insurance companies.
Income tax is tax levied on ones income. Income is
the proceeds that one makes from an activity, whether legal or not. The government seeks to share in your
prot on the basis that in the absence of order, you
would not have earned that prot.
One of the reasons why income tax has become a
focus area for most businesses is that the government
earns 30 per cent tax on the prot, making income
tax one of the single biggest expenses for businesses.
To put it in perspective, Safaricoms 2015 tax liability,
for example, is slightly under 10 per cent of its total
turnover of Sh163.37 billion.
Mr Waruiru is a senior tax manager with KPMG
Kenya
E-mail: rwaruiru@kpmg.co.ke.

14

BUSINESS DAILY | Tuesday June 9, 2015

REGIONAL NEWS
Oil and gas
exploration in East
Africa. The region
is a new hotspot
in hydrocarbon
exploration
after substantial
deposits of crude
oil were found
in Uganda and
major gas reserves
discovered in
Tanzania and
Mozambique. FILE

BRIEFING
PORT LOUIS
Mauritius year-on-year
ination falls to 0.5pc in May
Mauritius ination fell to 0.5 per cent yearon-year in May from 2.1 per cent a month
earlier, folowing a drop in food and non-alcoholic drink prices, ofcial data showed on
Friday. The drop in ination in May is due
to lower cost of restaurant and hotels and
lower prices of food and non-alcoholic beverages, the Statistics Mauritius ofce said
in a statement.
Meanwhile the Bank of Mauritius said on
Wednesday it would auction a 15-year
Treasury bond worth 1.8 billion rupees ($51
million) on June 10.

ABU DHABI

Tanzania aises estimate

of its natual gas eseves
EXPLORATION Reserves up from 46.5 trillion

cubic feet in June 2014 to 55.08 tcf in April 2015

anzanias current natural gas reserves are at about 55 trillion

cubic feet (tcf) following new
deep sea discoveries o its southern
coast, the east African nations energy
minister said. East Africa is a new
hotspot in hydrocarbon exploration
after substantial deposits of crude oil
were found in Uganda and major gas
reserves discovered in Tanzania and
Mozambique.
As a result of ongoing exploration
activity, natural gas resources discovered in the country rose from 46.5 tcf
in June 2014 to 55.08 tcf in April 2015,
equivalent to an increase of 18 per
cent, George Simbachawene, Tanzanias energy and minerals minister,
said in a presentation to Parliament on
Saturday. Tanzania in October raised
its estimate of recoverable natural gas
resources to up to 53.2 tcf.

He said the government had lifted

the natural gas resources estimate
following new discoveries by Statoil,
Exxon Mobil , BG Group and Ophir
Energy. Simbachawene said a pipeline
connecting oshore natural gas elds
to Tanzanias commercial capital Dar es
Salaam would be commissioned in September, ahead of the energy ministrys
previous estimates of November.
The commercial operational date
of gas processing plants and the pipeline has now been set at September
2015, he said.
The 532-km (330-mile) pipeline
and gas processing plants, nanced
by a $1.225 billion Chinese loan, were
initially expected to be completed last
year but were delayed from going online due to technical setbacks.
The government said the pipeline
would enable the country to switch to

the construction of a power transmission line in the north-east grid will be

nanced by a $693 million loan from
Chinas Exim Bank, he said. Tanzania
put on hold a much-awaited natural
gas Bill that was expected to be passed
by parliament in March, further delaying a law to govern its hydrocarbons
industry.
gas-red power plants and reduce oil
Parliament and government oimports, hence leading to annual savcials had said the east African nation
ings of over $1 billion.
planned to debate the Bill in parliaSimbachawene
ment in March month
said the government
to guide the development of its nascent gas
would invest in new
industry.
gas-red
power
The commecial
Tanzania and its
plants to boost electricity supply in east opeational date of gas southern neighbour, MoAfricas second-big- pocessing plants and zambique, are locked in a
race to be rst to export
gest economy, which
the pipeline has now gas from Africas eastern
has frequently been
hit by chronic energy been set at Septembe seaboard after huge discoveries oshore that
shortages.
2015
could transform their
During 2015/16
struggling economies.
the government will
GEORGE SIMBACHAWENE
ENERGY MINISTER
The country has already
start implementing
published three separate
the construction of a
policies on natural gas,
240-megawatt power plant that is expected to cost $344
including a draft energy policy that
million, he said. The minister said the
gives priority to domestic use of its
government would also start work in
hydrocarbons resources over liqueed natural gas exports. The gas nds
2015/16 on the construction of 1,148
had sparked a debate on how much gas
km of a new 400 kV power line at a
cost of $664 million in the north-west
should be used locally and how much
power grid. Another project involving
can be exported. -REUTERS

Buundi tax evenues fall as unest hits tade

Burundis tax revenues fell in May
compared to a year ago, the latest
sign that the economy is seizing up
after more than a month of unrest
triggered by President Pierre Nkurunzizas bid for a third term, ocial
data showed on Friday.
The poor African nations semiautonomous revenue board (OBR)
said it collected 33.9 billion francs
($22 million) in May, a third less than
the 49.9 billion francs targeted. It was
also 17 per cent lower than May 2014,
it said.
Burundians complain of rising
food prices and a shortage of dollars

even on the black market where the

currency has steadily weakened since
protests erupted in the capital. Traders say they have few customers, particularly for imported goods.
Since the outbreak of protests
against the third term, economic
activities are paralysed, said one
OBR ocial.
Imports, trade, banks activities are all aected by the crisis, and
this has a direct negative impact on
tax collection, said the ocial, who
asked not to be named.
The ocial central bank exchange
rate for Burundis franc is 1,548/1,573

to the dollar. But on the black market

the currency has steadily fallen, trading at 1,950/2,000 this week.
Demonstrations ared on April
26, a day after Nkurunziza declared
he would run again, a move demonstrators say violates the constitutions
two-term limit. Nkurunziza cites a
constitutional court ruling saying
he can stand.
Burundi, dependent on aid and
export revenues from tea and coee,
is facing its worst political crisis since
an ethnically charged civil war ended
in 2005. Activists say more than 30
people have been killed in the unrest,

which has seen frequent clashes between armed police and stone-throwing protesters.
The International Monetary Fund
has been pressing Burundi to boost
tax revenues to support fragile government nances. The state depended on donors to fund roughly half its
annual budget.
Tax revenues rose 21 per cent
to 166.5 billion francs in the three
months to March from a year before,
but dropped in April to 43.1 billion
francs from 62.8 billion francs a year
earlier, OBR gures showed.
-REUTERS

Etisalat to sell its stake in

Tanzanias Zantel to Millicom
United Arab Emirates telecom operator
Etisalat has agreed to sell its 85 per cent
stake in Zanzibar Telecom Limited (Zantel)
to Swedens Millicom, it said on Friday.
Zantel, which has struggled against larger
rivals Vodacom and Bharti Airtel, will have
up to $32 million in net current liabilities at
close of the deal, Etisalat said in an emailed
statement. Etisalat will receive $1 in cash
and Millicom will assume total debt obligations of $74 million under the terms of the
agreement which is still subject to regulatory approval by the Tanzanian Communication Regulatory Authority. Mobile phone
use has rocketed in Tanzania in the past
decade.

KAMPALA
Uganda losing tax revenue
to illicit tobacco trade
Uganda seized 13 million sticks of tobacco
valued at UGSh16 million ($203,337) in
2013/14, the second haul of its kind since
2009/10. This illicit trade, according to Mr
Armstrong Turyakira, the URA customs ofcial, has forced URA to initiate a reward of
10 per cent of any seized tobacco products
to whoever leaks information leading to any
seizures.
People [who leak information] have built
houses from this reward. And this trade
leads to a lot of counterfeits on the market,
which can be prevented, Mr Turyakira said
recently.

DODOMA
Tanzani PM urges speedy
conclusion to Nile Basin talks
Tanzania has urged the Nile Council of
Ministers to ensure they iron out the differences that have shrouded the sharing of
water from River Nile. Prime Minister Mizengo Pinda also appealed to the ministers
to ensure that Nile water resources are protected for the benet of citizens of member
states. Mr Pinda assured the ministers that
Tanzania would adhere to the principles
governing transboundary water resources
from the River Nile Basin. Ofciating at the
23rd Nile Council of Ministers (Nilecom)
meeting, Mr Pinda urged them to be vigilant in ensuring that no member state tampered with the water resources.

Tuesday June 9, 2015 | BUSINESS DAILY

15

TUESDAY, JUNE 9, 2015

p.16

MANAGEMENT
Consultancy helps rms
review growth strategies

p.17

BUSINESS GROWTH
Embrace change
and competition

CONSERVATION Kenyan entrepreneurs roll out pencils from recycled newspapers instead of traditional wood

Geen pencils m
making a mak in
stationey maket
as well as the potential to create employment.
ike any typical pencil, the one
They set up Green Pencils in June
Antony Kirori is holding is light,
2012. The company whose factory is locontains a graphite core and it
cated in Juja, Nairobi can manufacture
up to 100,000 pencils per month.
can also be sharpened with the usual
sharpener that is a permanent xture
Mr Ochieng said they use two kiloin primary schools.
grammes of old newspapers to make
But one thing starkly dierentiates
a dozen pencils.
this pencil from other brands recyThe process of making pencils
cled newspapers instead of the usual
from newspaper essentially involves
us reversing the process that was used
wood provide the casing for the black
to make paper soft, he said, adding
graphite stick.
This unique pencil is the brainchild
that their manufacturing process is a
of Mr Kirori, an engineer by training,
closely guarded secret.
and his business partner Ivan Ochieng,
We take the newspapers through a
who has studied nance and law. Both
total of 18 dierent processes that hardare passionate about saving the enviens it well enough to hold the graphite
stick, get sharpened and make it water
ronment.
resistant.
The process of making pencils
The product can be generic (showfrom newspaper essentially involves
ing the original newsus reversing the process
paper) or branded and
that was used to make the
used as marketing
paper soft, Mr Kirori told
The county impots tools ideal for corpothe Business Daily.
We only buy old newsparate sales promotions,
ove 100 million
pers from registered groups pencils evey yea
brand campaigns or
of youth, women and peoas gifts.
but ove 60 pe
ple living with disability in
They sell the pencent of these ae
cils mainly to primary
order to create jobs in the
schools, supermarcommunity.
countefeits
kets, blue chip comThey two met through
panies (for corporate
a friend with whom they IVAN OCHIENG, GREEN PENCILS
CO-FOUNDER
social responsibility
were both doing business
and marketing activiat the time.
Mr Kirori, having previously worked
ties) retail and specialty outlets, and
in the waste disposal business, wantindividuals.
ed to come up with useful by-products
The pencils sell for between Sh20
from the discarded materials.
and Sh45. Customers who order in bulk
pay less due to the benets of econoThe duo rst invested in charcoal
mies of scale.
briquettes made from sawdust and
paper but the project opped because
The pencils are also manufactured
the briquettes burnt as expected but
in two dierent sizes half and full
produced a lot of smoke.
ones. The latter is referred to as a
With more research as well as trial
Fundi Pencil.
and error, they settled on the green
The country imports over 100 million pencils every year but over 60 per
pencil for its eco-friendly qualities
BY MWIKALI LATI

Mr Ivan Ochieng (left) and Mr Antony Kirori, the co-founders of Green Pencils.
Below are some of their eco-friendly products. COURTESY

cent of these are counterfeits or are of

very low quality said Mr Ochieng. We
have the capacity to produce 100,000
pencils a month. We, however, do not
sell this much since demand is mainly
inuenced by the school calendar.
Green Pencils is not all about making money but environmental conservation, according to the two entrepreneurs. Mr Kirori says their product is
helping ght deforestation but regrets
that their eorts have not earned them
any incentives like tax breaks to promote green enterprises.
Climate change is a reality that

Kenyans and organisations are now

waking up to, he said.
Going green is not an option any
more and the business-as-usual corporate models are changing to more
sustainable models that are friendly
to and respect the natural environment.
Green Pencils is competing with
mainly wooden premium international brands from Europe and from
India.
However, the duo hopes that their
consistent quality, availability and affordability will soon put them on an

equal footing with the foreign brands.

High costs of advertising, however,
stops them from marketing their products in the print and electronic media.
But they get orders through their website and social media pages, complementing the sales made through retail
chains like Uchumi Supermarkets, Banana Box and Spinners Web.
Green Pencils, however, says that
the Kenya Bureau of Standards certication and Brand Kenya boards
Touch of Kenya product dierentiation mark has helped them considerably.
We are trying to change the perception that imported pencils are superior to locally manufactured ones,
said Mr Ochieng.
The environmentally friendly
pencil is still a relatively new product.
School stationery suppliers only want
to deal with what is already known in
the market but we hope they will soon
become more receptive.
Mr Ochieng and Mr Kirori are nalists of the 2015 Green Pioneer Accelerator Program which is co-sponsored by Growth Africa and Venture
Capital, among others.
It is a ve-month rigorous programme that assists companies that
are working towards climate change
to get their nancials and pitches in
shape, and prepares them for fundraising conversations with investors.
Upon graduating from the programme, Green Pencils hope to receive backing from angel investors
who could inject more funds into the
company to help it grow locally and
even in the region.
We have already diversied into
manufacturing pens and road studs.
We shall soon begin manufacturing
coloured pencils, eye pencils and road
signs, said Mr Ochieng.
The co-founders say they owe their
success to believing in their product
but also adjusting or rening it to suit
the customers needs without compromising quality.
Certication, a well-trained and
motivated work force, and building
relationships with clients are other
key aspects that entrepreneurs need
to be successful, they say.
mwikalilati@gmail.com

16

BUSINESS DAILY | Tuesday June 9, 2015

Tuesday June 9, 2015 | BUSINESS DAILY

Entepise

Consultancy guides
ms on how to
eview gowth plans

QUOTES

The important
thing is not
being afraid to
take a chance.
Remember, the
greatest failure is
to not try. Once you
nd something you
love to do, be the
best at doing it.

MANAGEMENT Blue Strategy Africa CEO asks

Over-borrowing is one of the well-known poisons that kill start-ups keen on pursuing success at all costs.

As young business, avoid

debt tap like the plague
your expected sales revenue shrinks to a third,
say experts.
This means if your start-up cost is estimated
at Sh1 million and you expect sales revenue of Sh1
million within a certain period, provide for a situation where the expenses rise to three million and
your revenue drops to one million.
This scenario, no matter how remote it seems,
BY MURORI KIUNGA
is more likely than most people expect and can
save one sleepless nights.
Entrepreneurs are wont to borrow or spend beThirdly, limit purchases to only what you need.
yond means to create the image of success. When Do not buy anything that is not for resale, such as
this happens at the start-up stage, and it often does, furniture on credit.
growth and cash ow will be constrained.
Do not try to be like an established business a
When juicy opportunities come, it would be few years into your establishment. Create room
dicult to access funds easily because of carrying for growth without compromising quality and
a heavy debt load; other lenders may keep your playing into the hands of the big players, many of
whom are unhappy about your presence.
business at bay.
Out of desperation, some entrepreneurs have
Your customers will be interested in the quality
ended up at a shylocks for cash at exploitative of your products more than anything else.
terms.
Fourthly, be cautious when
Most people, when starting, want
spending on advertisement and proLosing a sale
nice oces, big stock, good advertismotions.
because you
ing and promos.
There is no doubt that advertisOther than the most probable risk
ing and market promotions are cruhave no money
of purchasing what is not crucial at
cial to the success of every business.
to execute a deal
that moment, there is a bigger risk of
However, most people use the wrong
is bitte than the media, sending the wrong messages
spending the bulk of start-up capital
sweetness of a
only for protable opportunities to
while expecting quick returns.
escape before your eyes because you
Find out when adverting media
big discount
dont have the wherewithal.
or promotion activities are suitable
When starting a business, its imfor your business and focus on them
portant to observe ve key things to
rather than trying to be in too many
avoid overspending or getting into a debt trap.
places at the same time.
First, start small and grow slowly as you learn
Finally, ensure you dont lose two things in
the business. Never spend all the money you your business: stock and money.
This is only possible though an eective invenhave at once.
If you are in retail business or dealing with mul- tory and nancial controls.
tiproducts, buy stocks in small quantities spread
It is easy to sell a lot and then lose more though
over time so that you can understand what cus- poor inventory management, fraud or mismantomers need and at what quantities.
agement by your sta or yourself.
Your suppliers will tempt you to order large
Establishing good systems and separating
quantities so that you can enjoy bigger discounts business nances from your own will help you
but the pain of having dead stock and losing a maintain a healthy cash ow and grow.
sale because you have no money to execute a
For example, draw a regular salary commendeal is more bitter than the sweetness of a big surate with your input and protability.
discount.
Secondly, always provide for contigencies and Mr Kiunga is a business trainer and the aushortfalls in revenue.
thor of The Art of Entrepreneurship: StratYou should provide and plan for a scenario egies to Succeed in a Competitive Market.
where total cost estimate increases threefold and murorikiunga@yahoo.com

companies to create, not ght over, demand

management professors Chan Kim and
Rene Mauborgne.
n the world of John Achokah, the
The authors based their book on a decCEO of Nairobi-based consultan- ade-long study of more than 150 strategic
cy Blue Strategy Africa, rms can moves spanning more than 30 industries
render competition irrelevant. And over 100 years (1880-2000).
Under the strategy, every rm in any
neither do markets have to mature,
industry has its own blue ocean unconsaturate nor decline.
Instead, the US-educated manage- tested space for protability and rapid
ment specialist sees a big
growth. The secret lies in
market that remains unafhow a rm can discover
fected by competition.
this space.
Once you give
But that space belongs to
Mr Achokah, who inirms that go the extra mile them methodology tially tried the strategy in
to re-draw their industrys
South Africa, believes the
on how to think
boundaries. The irony is
Kenyan market is ripe for
outside the box,
the concept 10 years since it
that such a vast space is
they will epot
took root in the developed
unknown and untried by
world.
rms, he said.
extaodinay
The South African
Many rms that I have
esults
market readily embraced
talked to think its not posJOHN ACHOKAH, CEO, BLUE
sible to ignore competition
the concept because the
STRATEGY AFRICA
in Kenyas crowded markets.
market is more developed
The truth is that once you
and there are many mature
give them methodology on how to think rms, he said.
outside the box, they will come back to
A number of candidates are ready for
the blue-ocean plunge, Mr Achokah says,
report extraordinary results.
But in the Kenyan market where a but we are talking with CEOs especially
copycat culture denes competition, in the banking sector for trial.
Blue Strategy Africa has organised a
Mr Achokah is a contradiction. He tells
nearly all his clients that strategy sim- workshop for next month to introduce
ply means trying every trick in the book the concept in Kenya.
to beat the competition.
He believes that rms which underDemand, he says, should be created stand their own space will always nd it
rather than fought over. An idea popular- wasteful to spend resources on industrial
ised by Blue Ocean Strategy, a book pub- espionage, sta poaching or engaging in
lished in 2005 and written by INSEAD ills like sabotage.

Entepise

PEOPLE | IDEAS | NEWS

PEOPLE | IDEAS | NEWS

BY GEORGE OMONDI

DEBBI FIELDS
OUNDER AND SPOKESPERSON
OF MRS. FIELDS BAKERIES.

Blue Strategy
Africa CEO John
Achokah during
the interview
at his Upper
Hill ofce in
Nairobi.
DIANA NGILA

Since he launched his consultancy

in Nairobi last March, Mr Achokah
has engaged several people who formulate strategy for government and
the private sector.
A number of CEOs are already
aware of this strategy but still nd it
easier to get into others space than
pursue their own blue oceans.
He cites innovative products like
Safaricoms money transfer technology M-Pesa and M-Shwari, a mobilebased savings and loan bank account
operated by the telco and Commercial Bank of Africa, as examples of
blue oceans created in Kenya.
Generally, a blue ocean strategy
is hinged on product dierentiation
at low cost. Users strive to make the
competition irrelevant by reconstructing industry boundaries.

Mr Achokah, who holds an MBA

in Strategy from St Peters University
in New Jersey, says there are some
systematic tools and frameworks that
organisations such as Blue Strategy
Africa provide to enable rms break
away from the crowd and win new
customers step-by-step.
He started working in the US as
a client strategy manager and later
moved to South Africa as head of
strategy for Johannesburg-based
Eskom up to 2011.
He was later appointed the regional director of South Africas second largest coal mining rm, Exxaro,
which he headed up to early this year
before joining Blue Strategy Africa
which sent him to introduce the management concept in Nairobi.
omondi@ke.nationmedia.com

Nobody talks about

entrepreneurship as
survival, but thats
exactly what it is
and what nurtures
creative thinking.
Running that rst
shop taught me
business is not
nancial science;
its about trading:
buying and selling.
ANITA RODDICK
BRITISH BUSINESSWOMAN,
HUMAN RIGHTS ACTIVIST
AND ENVIRONMENTAL
CAMPAIGNER

Fenchman beats MKU founde to top entepise tophy

Mount Kenya University founder
Simon Gicharu has lost the 2015
Ernst & Young (EY) World Entrepreneur of the Year award to Mohed Altrad, a construction magnate from France.
The competition, which was
held on Sunday in Monaco, recognises entrepreneurs for resilience, integrity and impact in the
society while encouraging leadership skills.
Mr Gicharu (pictured) topped
the regional category of the competition and travelled to Manaco
hoping to bag the title that Equity
Banks CEO received in 2012.

Mr Altrad, who was born in

Syria but moved to France at 17
has worked himself up the corporate ladder to head Altrad Group,
a conglomerate that last year
generated sales of nearly $1 billion (Sh100 billion).
Mohed is an inspirational entrepreneur who demonstrates that
determination and perseverance
can overcome adversity, said Maria Pinelli, EYs global vice-chair for
Strategic Growth Markets.
He has grown his businesses
consistently over a long period of
time and is now a beacon for other
entrepreneurs in France and be-

yond to follow.
The grand prize had 65 entrepreneurs from 53 countries competing for the gem.
Mr Altrad and a business partner bought a nearly bankrupt scaffolding maker in 1985 to form the
basis of what is now called Altrad

Group. The company, which is now

the world leader in cement mixers
and a European leader in scaolding and wheelbarrows, expects to
hit $1.13 billion (Sh113 billion) in
revenues by 2016.
He was forbidden from going to school as a child, moved
to France to set up a new life and
is now one of the countrys most
successful entrepreneurs, said
Rebecca MacDonald, chair of the
World Entrepreneur of the Year
judging panel.
The judges were impressed
by his ability to build and sustain
growth over 30 years and by his

humility and character.

Mr Gicharu was the overall winner during the regional competition while Alex Nyaga of Parapet
Group won the emerging entrepreneur category. Mary Okelo of
Makini schools won the Lifetime
Achievement Award.
Mr Gicharu holds several chairmanship positions, to which he
was either appointed or serves as
a volunteer.
He chairs the National Private
Universities Association of Kenya
and the Rural Electrication Authority.
-SIMON CIURI

17

Your most unhappy

customers are your
greatest source of
learning.
BILL GATES
AMERICAN BUSINESS
MAGNATE

Embace change, chaos

and competition to thive

BY SRIRAM BHABARATAM

The entrepreneur always searches

for change, responds to the chaos, and
exploits it as an opportunity.

ntrepreneurs are mad and businesses

are a proof of their madness. Both, in
a positive way. Most entrepreneurs
defy most laws of normal human sensibilities. How else would you explain someone
opting out of the comfort of steady, secure,
comfortable and well-paying job to start
something that is totally driven by passion,
faced with chaos, change and competition?
These are of course in addition to the madness of the entrepreneur himself.
Small businesses bring in a myriad of
complexities by their very nature. And especially in the current times of rapid technological, social and business evolution, small
businesses are pushed more and more to
shape up or shape out.
The three hurdles that every business
faces are change, chaos and competition. It
is important for businesses to acknowledge
the presence of these hurdles, and gure out
a way to embrace them. Businesses that
are against embracing them, can prepare
themselves for irrelevance.
.Embrace change: The entrepreneur
always searches for change, responds
to it and exploits it as an opportunity.
Where others see obstacles, an entrepreneur
sees an opportunity.
Change is the only constant thing in life
and business. It is even more inevitable in
small businesses, sometimes more quickly
and more often than what the enterprise
is prepared for. While thats bad news, the
good news is that most entrepreneurs are
aware of this and are game for it.
The fear of the unknown often pushes
entrepreneurs back against change. The
three things that entrepreneurs can do to
embrace change are:
Look forward: Take small steps at a
time. In to adapt to change, dont make
drastic decisions. It may aect your team,
your customers or even yourself. So make
a plan and be kind to yourself.
Make mistakes: It is perfectly okay to
make mistakes. If you are a perfectionist
like most entrepreneurs, acknowledge that
mistakes are part of change.
Seek help: Dont hesitate to seek help
from those who have walked the path, seen
the challenges, been through them. The earlier you do this, the better is it for your business. Let go of the I know it all attitude, it is
the worst thing that can happen to you
.Embrace chaos: Real discoveries come from chaos, from going to
the place that looks wrong, stupid
and foolish. As the saying goes, all great

changes are preceded by chaos. Most

entrepreneurs are opportunity addicts,
looking across the horizon to seek, chase
and grab opportunities. And while doing
so operate in the zone of chaos, because
they either create chaos, or nd order in
chaos. While chaos in itself may not be to
the liking of most small businesses, it is
important to embrace the chaos, to accept
the uncertainties of business, and the market. The three things that entrepreneurs
can do to embrace chaos are:
Accept: Acknowledge that chaos is
part of business and way of life for any
entrepreneur. You may not have to necessarily ask for it, but dont resist it when
faced with it
Stay focused: It is in the moment of
chaos that you need to carefully make a
choice between the important and the urgent. It is easy to lose focus and get trapped,
but stay focused on your business objectives, goals and successes.
Go with the ow: Chaos cannot be
predictable, but can be transformed. So
it is important to go with the ow and not
get psyched about it. The more you are
tuned to embrace chaos, the lesser will it
impact you the hard way.
.Embrace competition: Competition is a good thing. It forces us to
do our best.
The smarter the entrepreneur you are,
the quicker you are to acknowledge that
your idea or business cannot be everything
to everyone and forever. While entrepreneurs may not hate competition, businesses hate competitors.
Imagine just when you think you have
come up with the most innovative solution or a product, you discover that your
idea or solution is one among the many
in the market.
This is every entrepreneurs biggest
fear. But instead of fearing, embrace it.
Many companies have found their sweet
spot in the market by embracing competition and not ghting it. The three things
that entrepreneurs can do to embrace
competition are:
Promote your competition where
they are strong and you are not. It may
sound illogical, but when you do this, you
can turn things upside down and see how
you can combine your strengths and shortcomings to create a win-win situation.
Actively engage with both your competition and your customers. Your competition gives you insights of what your
customers want and your customers give
you insights of what your competition
provides them.
Take risks: Dont hesitate to take risks.
If you want the most reward, you have
to take the most risk. The day you stop
taking risks, you will end up working for
someone who does.

Mr Sriram is the founder and chief mentor of Kuza Biashara Limited, an organisation coaching youth and SME owners in
Kenya. E-mail: sri@kuzabiashara.co.ke
or @Sbharatam

16

BUSINESS DAILY | Tuesday June 9, 2015

Tuesday June 9, 2015 | BUSINESS DAILY

Entepise

Consultancy guides
ms on how to
eview gowth plans

QUOTES

The important
thing is not
being afraid to
take a chance.
Remember, the
greatest failure is
to not try. Once you
nd something you
love to do, be the
best at doing it.

MANAGEMENT Blue Strategy Africa CEO asks

Over-borrowing is one of the well-known poisons that kill start-ups keen on pursuing success at all costs.

As young business, avoid

debt tap like the plague
your expected sales revenue shrinks to a third,
say experts.
This means if your start-up cost is estimated
at Sh1 million and you expect sales revenue of Sh1
million within a certain period, provide for a situation where the expenses rise to three million and
your revenue drops to one million.
This scenario, no matter how remote it seems,
BY MURORI KIUNGA
is more likely than most people expect and can
save one sleepless nights.
Entrepreneurs are wont to borrow or spend beThirdly, limit purchases to only what you need.
yond means to create the image of success. When Do not buy anything that is not for resale, such as
this happens at the start-up stage, and it often does, furniture on credit.
growth and cash ow will be constrained.
Do not try to be like an established business a
When juicy opportunities come, it would be few years into your establishment. Create room
dicult to access funds easily because of carrying for growth without compromising quality and
a heavy debt load; other lenders may keep your playing into the hands of the big players, many of
whom are unhappy about your presence.
business at bay.
Out of desperation, some entrepreneurs have
Your customers will be interested in the quality
ended up at a shylocks for cash at exploitative of your products more than anything else.
terms.
Fourthly, be cautious when
Most people, when starting, want
spending on advertisement and proLosing a sale
nice oces, big stock, good advertismotions.
because you
ing and promos.
There is no doubt that advertisOther than the most probable risk
ing and market promotions are cruhave no money
of purchasing what is not crucial at
cial to the success of every business.
to execute a deal
that moment, there is a bigger risk of
However, most people use the wrong
is bitte than the media, sending the wrong messages
spending the bulk of start-up capital
sweetness of a
only for protable opportunities to
while expecting quick returns.
escape before your eyes because you
Find out when adverting media
big discount
dont have the wherewithal.
or promotion activities are suitable
When starting a business, its imfor your business and focus on them
portant to observe ve key things to
rather than trying to be in too many
avoid overspending or getting into a debt trap.
places at the same time.
First, start small and grow slowly as you learn
Finally, ensure you dont lose two things in
the business. Never spend all the money you your business: stock and money.
This is only possible though an eective invenhave at once.
If you are in retail business or dealing with mul- tory and nancial controls.
tiproducts, buy stocks in small quantities spread
It is easy to sell a lot and then lose more though
over time so that you can understand what cus- poor inventory management, fraud or mismantomers need and at what quantities.
agement by your sta or yourself.
Your suppliers will tempt you to order large
Establishing good systems and separating
quantities so that you can enjoy bigger discounts business nances from your own will help you
but the pain of having dead stock and losing a maintain a healthy cash ow and grow.
sale because you have no money to execute a
For example, draw a regular salary commendeal is more bitter than the sweetness of a big surate with your input and protability.
discount.
Secondly, always provide for contigencies and Mr Kiunga is a business trainer and the aushortfalls in revenue.
thor of The Art of Entrepreneurship: StratYou should provide and plan for a scenario egies to Succeed in a Competitive Market.
where total cost estimate increases threefold and murorikiunga@yahoo.com

companies to create, not ght over, demand

management professors Chan Kim and
Rene Mauborgne.
n the world of John Achokah, the
The authors based their book on a decCEO of Nairobi-based consultan- ade-long study of more than 150 strategic
cy Blue Strategy Africa, rms can moves spanning more than 30 industries
render competition irrelevant. And over 100 years (1880-2000).
Under the strategy, every rm in any
neither do markets have to mature,
industry has its own blue ocean unconsaturate nor decline.
Instead, the US-educated manage- tested space for protability and rapid
ment specialist sees a big
growth. The secret lies in
market that remains unafhow a rm can discover
fected by competition.
this space.
Once you give
But that space belongs to
Mr Achokah, who inirms that go the extra mile them methodology tially tried the strategy in
to re-draw their industrys
South Africa, believes the
on how to think
boundaries. The irony is
Kenyan market is ripe for
outside the box,
the concept 10 years since it
that such a vast space is
they will epot
took root in the developed
unknown and untried by
world.
rms, he said.
extaodinay
The South African
Many rms that I have
esults
market readily embraced
talked to think its not posJOHN ACHOKAH, CEO, BLUE
sible to ignore competition
the concept because the
STRATEGY AFRICA
in Kenyas crowded markets.
market is more developed
The truth is that once you
and there are many mature
give them methodology on how to think rms, he said.
outside the box, they will come back to
A number of candidates are ready for
the blue-ocean plunge, Mr Achokah says,
report extraordinary results.
But in the Kenyan market where a but we are talking with CEOs especially
copycat culture denes competition, in the banking sector for trial.
Blue Strategy Africa has organised a
Mr Achokah is a contradiction. He tells
nearly all his clients that strategy sim- workshop for next month to introduce
ply means trying every trick in the book the concept in Kenya.
to beat the competition.
He believes that rms which underDemand, he says, should be created stand their own space will always nd it
rather than fought over. An idea popular- wasteful to spend resources on industrial
ised by Blue Ocean Strategy, a book pub- espionage, sta poaching or engaging in
lished in 2005 and written by INSEAD ills like sabotage.

Entepise

PEOPLE | IDEAS | NEWS

PEOPLE | IDEAS | NEWS

BY GEORGE OMONDI

DEBBI FIELDS
OUNDER AND SPOKESPERSON
OF MRS. FIELDS BAKERIES.

Blue Strategy
Africa CEO John
Achokah during
the interview
at his Upper
Hill ofce in
Nairobi.
DIANA NGILA

Since he launched his consultancy

in Nairobi last March, Mr Achokah
has engaged several people who formulate strategy for government and
the private sector.
A number of CEOs are already
aware of this strategy but still nd it
easier to get into others space than
pursue their own blue oceans.
He cites innovative products like
Safaricoms money transfer technology M-Pesa and M-Shwari, a mobilebased savings and loan bank account
operated by the telco and Commercial Bank of Africa, as examples of
blue oceans created in Kenya.
Generally, a blue ocean strategy
is hinged on product dierentiation
at low cost. Users strive to make the
competition irrelevant by reconstructing industry boundaries.

Mr Achokah, who holds an MBA

in Strategy from St Peters University
in New Jersey, says there are some
systematic tools and frameworks that
organisations such as Blue Strategy
Africa provide to enable rms break
away from the crowd and win new
customers step-by-step.
He started working in the US as
a client strategy manager and later
moved to South Africa as head of
strategy for Johannesburg-based
Eskom up to 2011.
He was later appointed the regional director of South Africas second largest coal mining rm, Exxaro,
which he headed up to early this year
before joining Blue Strategy Africa
which sent him to introduce the management concept in Nairobi.
omondi@ke.nationmedia.com

Nobody talks about

entrepreneurship as
survival, but thats
exactly what it is
and what nurtures
creative thinking.
Running that rst
shop taught me
business is not
nancial science;
its about trading:
buying and selling.
ANITA RODDICK
BRITISH BUSINESSWOMAN,
HUMAN RIGHTS ACTIVIST
AND ENVIRONMENTAL
CAMPAIGNER

Fenchman beats MKU founde to top entepise tophy

Mount Kenya University founder
Simon Gicharu has lost the 2015
Ernst & Young (EY) World Entrepreneur of the Year award to Mohed Altrad, a construction magnate from France.
The competition, which was
held on Sunday in Monaco, recognises entrepreneurs for resilience, integrity and impact in the
society while encouraging leadership skills.
Mr Gicharu (pictured) topped
the regional category of the competition and travelled to Manaco
hoping to bag the title that Equity
Banks CEO received in 2012.

Mr Altrad, who was born in

Syria but moved to France at 17
has worked himself up the corporate ladder to head Altrad Group,
a conglomerate that last year
generated sales of nearly $1 billion (Sh100 billion).
Mohed is an inspirational entrepreneur who demonstrates that
determination and perseverance
can overcome adversity, said Maria Pinelli, EYs global vice-chair for
Strategic Growth Markets.
He has grown his businesses
consistently over a long period of
time and is now a beacon for other
entrepreneurs in France and be-

yond to follow.
The grand prize had 65 entrepreneurs from 53 countries competing for the gem.
Mr Altrad and a business partner bought a nearly bankrupt scaffolding maker in 1985 to form the
basis of what is now called Altrad

Group. The company, which is now

the world leader in cement mixers
and a European leader in scaolding and wheelbarrows, expects to
hit $1.13 billion (Sh113 billion) in
revenues by 2016.
He was forbidden from going to school as a child, moved
to France to set up a new life and
is now one of the countrys most
successful entrepreneurs, said
Rebecca MacDonald, chair of the
World Entrepreneur of the Year
judging panel.
The judges were impressed
by his ability to build and sustain
growth over 30 years and by his

humility and character.

Mr Gicharu was the overall winner during the regional competition while Alex Nyaga of Parapet
Group won the emerging entrepreneur category. Mary Okelo of
Makini schools won the Lifetime
Achievement Award.
Mr Gicharu holds several chairmanship positions, to which he
was either appointed or serves as
a volunteer.
He chairs the National Private
Universities Association of Kenya
and the Rural Electrication Authority.
-SIMON CIURI

17

Your most unhappy

customers are your
greatest source of
learning.
BILL GATES
AMERICAN BUSINESS
MAGNATE

Embace change, chaos

and competition to thive

BY SRIRAM BHABARATAM

The entrepreneur always searches

for change, responds to the chaos, and
exploits it as an opportunity.

ntrepreneurs are mad and businesses

are a proof of their madness. Both, in
a positive way. Most entrepreneurs
defy most laws of normal human sensibilities. How else would you explain someone
opting out of the comfort of steady, secure,
comfortable and well-paying job to start
something that is totally driven by passion,
faced with chaos, change and competition?
These are of course in addition to the madness of the entrepreneur himself.
Small businesses bring in a myriad of
complexities by their very nature. And especially in the current times of rapid technological, social and business evolution, small
businesses are pushed more and more to
shape up or shape out.
The three hurdles that every business
faces are change, chaos and competition. It
is important for businesses to acknowledge
the presence of these hurdles, and gure out
a way to embrace them. Businesses that
are against embracing them, can prepare
themselves for irrelevance.
.Embrace change: The entrepreneur
always searches for change, responds
to it and exploits it as an opportunity.
Where others see obstacles, an entrepreneur
sees an opportunity.
Change is the only constant thing in life
and business. It is even more inevitable in
small businesses, sometimes more quickly
and more often than what the enterprise
is prepared for. While thats bad news, the
good news is that most entrepreneurs are
aware of this and are game for it.
The fear of the unknown often pushes
entrepreneurs back against change. The
three things that entrepreneurs can do to
embrace change are:
Look forward: Take small steps at a
time. In to adapt to change, dont make
drastic decisions. It may aect your team,
your customers or even yourself. So make
a plan and be kind to yourself.
Make mistakes: It is perfectly okay to
make mistakes. If you are a perfectionist
like most entrepreneurs, acknowledge that
mistakes are part of change.
Seek help: Dont hesitate to seek help
from those who have walked the path, seen
the challenges, been through them. The earlier you do this, the better is it for your business. Let go of the I know it all attitude, it is
the worst thing that can happen to you
.Embrace chaos: Real discoveries come from chaos, from going to
the place that looks wrong, stupid
and foolish. As the saying goes, all great

changes are preceded by chaos. Most

entrepreneurs are opportunity addicts,
looking across the horizon to seek, chase
and grab opportunities. And while doing
so operate in the zone of chaos, because
they either create chaos, or nd order in
chaos. While chaos in itself may not be to
the liking of most small businesses, it is
important to embrace the chaos, to accept
the uncertainties of business, and the market. The three things that entrepreneurs
can do to embrace chaos are:
Accept: Acknowledge that chaos is
part of business and way of life for any
entrepreneur. You may not have to necessarily ask for it, but dont resist it when
faced with it
Stay focused: It is in the moment of
chaos that you need to carefully make a
choice between the important and the urgent. It is easy to lose focus and get trapped,
but stay focused on your business objectives, goals and successes.
Go with the ow: Chaos cannot be
predictable, but can be transformed. So
it is important to go with the ow and not
get psyched about it. The more you are
tuned to embrace chaos, the lesser will it
impact you the hard way.
.Embrace competition: Competition is a good thing. It forces us to
do our best.
The smarter the entrepreneur you are,
the quicker you are to acknowledge that
your idea or business cannot be everything
to everyone and forever. While entrepreneurs may not hate competition, businesses hate competitors.
Imagine just when you think you have
come up with the most innovative solution or a product, you discover that your
idea or solution is one among the many
in the market.
This is every entrepreneurs biggest
fear. But instead of fearing, embrace it.
Many companies have found their sweet
spot in the market by embracing competition and not ghting it. The three things
that entrepreneurs can do to embrace
competition are:
Promote your competition where
they are strong and you are not. It may
sound illogical, but when you do this, you
can turn things upside down and see how
you can combine your strengths and shortcomings to create a win-win situation.
Actively engage with both your competition and your customers. Your competition gives you insights of what your
customers want and your customers give
you insights of what your competition
provides them.
Take risks: Dont hesitate to take risks.
If you want the most reward, you have
to take the most risk. The day you stop
taking risks, you will end up working for
someone who does.

Mr Sriram is the founder and chief mentor of Kuza Biashara Limited, an organisation coaching youth and SME owners in
Kenya. E-mail: sri@kuzabiashara.co.ke
or @Sbharatam

18

BUSINESS DAILY | Tuesday June 9, 2015

Tuesday June 9, 2015 | BUSINESS DAILY

19

MONEY & MARKETS

NEWS I REVIEWS I ANALYSIS

BAT Kenyas shae

down on foeigne
exits, stingent law

NSE 20 shae
index sheds
22.63 points
BY GEOFFREY IRUNGU

STOCKS Share at Sh707, falling 8.4pc in a week

against previous gain of 5.8pc a week earlier

sets. We have seen some counters lose
out more than others on this foreign
BAT Kenyas share has shed gains made movement, especially the blue chips,
in May as foreigners exited against a said ABC Capital corporate nance
background of shilling volatility and manager Johnson Nderi.
a tougher regulatory regime which
Foreign investors have this year
slapped a two per cent tax on local pulled out Sh600 million from the
BAT counter. Share owners have seen
sales from last Friday.
their worth fall by Sh34.3
The counter closed
yesterday at Sh707 havbillion since the Sh1,050
ing dropped 8.4 per cent
peak in October last year,
in over a week in conwhen the stock was driven
The pice
by investors looking to lock
trast 5.8 per cent gain
movement is
in a higher dividend that
the preceding week.
This came as Alli- mainly on maket was issued at Sh42 per
ance One, a cured tojittes, especially share for the year ended
bacco leaf exporter, reDecember 2014.
foeign investos
ported it was reducing
The price was, howwho have become ever, seen as tending tolocal operations on an
adverse global regulamoe skeptical of wards the steeper side
tory regime.
when looked at in terms
shilling-backed
At its current price
of dividend yield which
assets
was at four per cent, courtlevel BAT is 22.1 per
ing a price correction after
cent down year to date,
JOHNSON NDERI, ABC CAPITAL
marking turnaround in
closure of books at the end
fortunes of the counter
of March.
that was one of the stellar performInvestors had enjoyed a higher
ers at the bourse in 2014 enjoying a dividend yield of 6.8 per cent in 2013
full-year price gain of 51.3 per cent when the stock averaged Sh555 and
to Sh908.
the company paid a dividend of Sh37
The price movement is mainly per share.
Concerns in particular surround the
on market jitters, especially from
foreign investors who have become tobacco sector over the new and more
more skeptical of shilling-backed as- stringent tobacco laws which came

BAT

BY CHARLES MWANIKI

1/2/14

6/2/15
SOURCE:THOMSON REUTERS

A tobacco farmer inspects his crop at Malakisi town in Bungoma on January 27. The
sector is concerned over stringent laws which came into effect last Friday.
JARED NYATAYA

into eect last Friday. The guidelines

stipulate that cigarette makers must
display pictogram health warnings on
cigarette packages and wrappers, while
sales made in Kenya will attract a two
per cent health tax which will go towards the Tobacco Control Fund.
BAT has challenged the new laws
in court, arguing that some of the provisions are unlikely to succeed in addressing public health concerns and
could edge out legitimate players in
favour of illicit traders.
US-based tobacco company Alliance One International announced
last week that it was scaling back its
Kenyan operations in response to the
poor global outlook of the industry.
This will result in the rm no longer
contracting farmers to grow tobacco
and a reduction in sta at its Thika-

based processing plant. Standard Investment Bank says due to the new
regulations and determination by the
government to tackle social, environmental and health impacts of tobacco, the share is looking at a downside,
with a fair value of Sh599, 16.6 per cent
down on the current price.
This (government drive) raises the
prospect that excise tax to the sector
could also be raised drastically in the
upcoming national budget, said SIB
analyst Eric Musau in the BAT valuation note.
According to Mr Nderi, however,
BATs saving grace is likely to come
from the contract manufacturing
and sales business which will not be
aected by the new laws.

The Nairobi Securities Exchange

(NSE) 20 Share Index continued to
fall yesterday, following a trend set
in the last several weeks.
The index shed 22.63 points to
stand at 4761.44 while the All Share
Index (NASI) fell by 1.25 points to
stand at 162.53.
The main index, NSE 20, is now
6.96 per cent down compared to the
beginning of the year, illustrating the
extent to which the market has felt
the eect of the controversial capital
gains tax and departure of foreign
investors.
The NSE players have recently said
they are experiencing jitters because
of the uncertainty surrounding who
between brokers and investors should
implement the CGT.
Another factor cited as responsible
for the fall of the NSE is the attractiveness of the Egyptian stock market
following the governments suspension of a proposed CGT. The Nigerian
exchange has also been a magnet to
foreign investors.
The CfC Stanbic Holdings share
was the largest gainer yesterday as it
rose by 5.9 per cent to stand at Sh108
while B.O.C Kenya rose by 5.8 per
cent to Sh127.
The third largest gainer was Express Kenya whose price went up by
4.5 per cent to Sh5.85 a share.
The largest loser was Pan Africa
Holdings, shaving o 6.9 per cent
followed by Scangroup that lost 4.5
per cent.

cmwaniki@ke.nationmedia.com

Chuch in Sh1.5bn ten-stoey Westlands apatment poject

BY JOHN GACHIRI

The Mennonite Church is putting up

a 10-storey high-end apartment block
in Nairobis Westlands, joining other
local churches with similar real estate
ventures.
The Mennonite Board in Eastern
Africa Registered Trustees (MBEA) is
developing Sky View Gardens, an apartment complex with 64 units comprising 32 two-bedroom and 32 three-bedroom apartments on a three-and-a-half
acre plot.
The church said that it decided to
borrow a leaf from other churches and
non-prot organisations that are turning to real estate to fund operations.
While this is new for Mennonite

Board in Eastern Africa (MBEA), many

churches and mission organisations are
taking similar initiatives, creating a legal investment arm for their organisations, said MBEA chairman Philip
Okeyo in a church newsletter.
The sale price of Sh20.25 million for
a two-bedroom and Sh26.25 million for
a three-bedroom unit puts the value of
the project at around Sh1.49 billion.
Groundbreaking is expected in the
next few weeks and construction should
be completed in 18 months.
The churchs other real estate investment is the Amani Gardens Inn, also
located in Westlands.
Other churches and organisations
that have invested in real estate include the Catholic Church which has

Figures

Sh26.25m

Amount that a three-bedroom unit

will cost prospecting homeowners
once the Sky View Gardens project
is completed within 18 months

Cardinal Otunga Plaza in Nairobis city

centre. SALATON NJAU
put up Pacis Centre in Westlands and
Cardinal Otunga Plaza in the central

business district. It also owns an insurance rm.

Presbyterian also has Presby Investments in real estate while Methodist
Church has built guest houses. Mainstream churches have also invested in
universities and hospitals. The Mennonite churchs leadership said it will

use the funds to expand its network.

We are very excited about how Sky
View Gardens will generate funds for
developing missionary church leadership, build awareness and passion
for mission and enable churches to be
planted among new language and people groups, said the Eastern Mennonite
Missions regional representative Aram
DiGennaro.
Analysts expect more landowners to
develop their plots to take advantage
of high returns in the real estate sector.
Rules are also set to be drafted making
it expensive to hold idle land.
Cytonns weekly report says that the
Valuation and Rating Bill is expected
to encourage landowners to develop
their plots.

20

BUSINESS DAILY | Tuesday June 9, 2015

MONEY
MARKETS
COUNTY&BUSINESS

Stockbokes with
foeign desks top
equities tading
BOURSE Kestrel Capital, SBG Securities and

Rencap account for 55 per cent of May turnover

ket and into markets like Egypt and
Nigeria in order to remain competStockbrokers with strong foreign
itive and attract money to its capital
markets, CGT cannot be practically
trading desks continued to domiapplied to a stock exchange, said
nate the equities market in May,
Kestrel Capital chief executive ofwith the top-three, Kestrel Capital,
cer Andre DeSimone.
SBG Securities and Renaissance
Kestrel claimed a 23 per cent
Capital (Rencap), accounting for
share of trade turnover in the mar55 per cent of turnover.
The three collectively had 47.7 per
ket last month at Sh9.8 billion, folcent market share in April.
lowed by SBG Securities (a subsidiary of Standard Bank
Nairobi
Securities Exchange (NSE)
SA) which had trades
data shows the marworth Sh7.43 billion or
ket turnover for May,
17.43 per cent.
We expect the
while accounting for
Rencap recorded
stock maket to
both purchases and
trades of Sh6.36 bilundepefom in lion or 14.9 per cent of
sales, stood at Sh42.66
billion meaning that
the nea tem due the total, while Faida
a net Sh21.33 billion to inteest ate and Investment Bank on
a strong showing in
changed hands.
Foreign
inves- cuency volatility local corporate trades
tor trades accounted
was fourth at 8.23
CYTONN INVESTMENTS
for 62 per cent of the
per cent or Sh3.51 bilFINANCIAL ADVISORY FIRM
turnover at Sh26.75 billion in trades.
lion. Sales outweighed
Equity Investment
buys on a ratio of 54 per cent to 46
Bank, which last year entered into
a research and trading partnership
per cent as investors redistributed
with UK-based investment bank
their investments into other sectors of the economy and on capital
Exotix Partners, was ranked fth
ight informed by the capital gains
in May trading Sh3.15 billion reptax uncertainty.
resenting a share of 7.39 per cent of
Over the past couple of months
the markets total.
we have witnessed a movement of
The high traded volume for these
foreign capital from the Kenyan marstockbrokers means that they should
BY CHARLES MWANIKI

Ethiopia eyes
exta 12,000MW
in next ve yeas

Stockbrokers equity trading

turnover May 2015
Stockbroker/
Investment bank

May
equity
trades
(Sh Bn)

Market
share (%)

Kestrel Capital

9.82

23.0%

SBG Securities

7.43

17.4%

Renaissance
Capital

6.36

14.9%

Faida Inv. Bank

3.51

8.3%

Equity Inv. Bank

3.15

7.4%

African Alliance
Inv. Bank

2.92

6.8%

Standard Inv. Bank

2.44

5.7%

Others (13)

7.03

16.5%

42.66

100%

Kestrel Capital, SBG Securities and Renaissance

Capital accounted for 55 per cent of total traded
turnover at the NSE in May, mainly on foreign
corporate trades.
SOURCE: NSE

A man monitors trading on the Nairobi Securities Exchange digital screen.

Stockbrokers last year made collective net earnings of Sh1.26 billion. FILE
feature highly in the half year earnings race, with brokerage commissions providing the bulk of revenue.
Stockbrokers normally earn between
1.5 and 2.1 per cent in commission
per trade at the NSE, although larger
customers such as foreign and local
corporates are given discounts.

Volatile market
A volatile market boosts stockbroker
revenue given dealers make commissions on both buys and sells. Trading
turnover in the market for the rst
ve months of the year has closely
matched the totals for the same period in 2014 at Sh82 billion.
Some analysts, however, see the
market as likely to become quieter as
investors exercise more prudence in
the wake of a bearish run which has
reduced prot taking activity.

Given the relatively lower earnings growth prospects and stretched

valuations, we are of the view that
active money managers will be able
to derive returns through prudent
stock picking.
We expect the stock market to
underperform in the near term due
to interest rate and currency volatility, said nancial advisory rm
Cytonn Investments.
In 2014, the market turnover
stood at Sh215.7 billion (Sh431 billion in both buys and sales), which
was a record for the bourse.
According to industry data, stockbrokers last year made collective net
earnings of Sh1.26 billion a 106.7
per cent increase from Sh608 million
in 2013 mainly due to higher brokerage commission earnings.
cmwaniki@ke.nationmedia.com

Ethiopia plans to launch hydropower dams and other renewable energy

projects over the ve years to 2020,
that will add an additional 12,000
megawatts (MW) of electricity upon
completion, a senior ocial said.
With one of the continents fastestgrowing economies, Ethiopia wants
to become a manufacturing hub and
Africas top energy exporter by tapping the numerous rivers that cascade
through its highlands.
Experts say the Horn of Africa
nation has the potential to generate
45,000 megawatts of hydropower.
Under a 2010-2015 development
blueprint, the Growth and Transformation Plan 1 (GTP 1), Ethiopia started
work on the $4.1 billion (Sh339 billion)
Grand Renaissance Dam and planned
to complete the $1.8 billion (Sh175 billion) Gilgel Gibe 3.
Together the dams will boost generating capacity from 2,400 MW now
to more than 10,000 MW upon completion. Under a new 2015-2020 plan,
or GTP 2, that is due to be endorsed
by parliament in September, projects
generating 12,000MW will be added,
Azeb Asnake, chief executive of Staterun Ethiopian Electric Power, told Reuters. For this ambitious plan, the
idea is to nance at least 50 per cent
by our own coers, by the Ethiopian
government, and the rest from dierent sources, she said of the projects
slated to be launched by 2020.
Ethiopias total energy plans could
cost the country up to $25 billion
(Sh2.4 trillion), Ms Azeb said. They
could be grants, soft loans and commercial loans from foreign banks, governments and the like, she said.
-REUTERS

Chinese m signs Sh96bn contact

fo Lamu coal-ed electicity plant
BY NEVILLE OTUKI

The consortium that won a tender to

construct a coal-red power plant in
Lamu yesterday signed a Sh96 billion
($1 billion) contract for the construction set to start in September.
Amu Power Company, a consortium bringing together rms like
Gulf Energy and Centum Investment,
said it had signed the deal with Power
Construction Corporation of China.
The Chinese rm, part of the consortium, will be in charge of setting
up the plant.
We have signed the construction
contract today (Monday), Amu Power CEO Francis Njogu said on phone
from China.

Construction of the 981.5 megawatt plant is expected to start on September 30 and will take 21 months to
produce electricity at 7.52 dollar cents
per kilowatt hour, almost a third of
the price for diesel-red plants.
The project is valued at Sh192 billion ($2 billion) and will be nanced
through debt which accounts for
three quarters and shareholders
equity ($500 million).
Amu Power in February bagged a
$1.2 billion (Sh1,013.2 billion) nancing from the Industrial Commercial
Bank of China and is negotiating with
local banks for the remaining loan.
The African Development Bank
(AfDB) will provide a partial risk
guarantee for the coal plant, the larg-

est in East and Central Africa.

The construction is expected to
create thousands of jobs for machine
operators, engineers and administrators and stimulate consumption of
building materials like cement, steel
and stones.
Its promoters are already working
with the National Youth Service to
train locals in technical skills.
Among the outstanding components of the project is the construction of a concrete and steel slab covering 100 square acres and a concrete
tower reported to be the tallest in
eastern Africa.
The plant is part of the planned
Lamu Port South Sudan-Ethiopia
Transport corridor and is set to place

Mr Francis Njogu, the Amu Power Company CEO, announced the signing of the
contract from China. FILE
Kenya among nations which rely on
coal energy such as South Africa, the
US and China.
Kenya will initially import coal
from South Africa and later turn
to local supply from Kitui once min-

ing starts.
The consortium has recently
sought to win over Lamu leadership,
amid claims by civil society activists
that the coal project would damage
the fragile ecosystem.

Tuesday June 9, 2015 | BUSINESS DAILY

21

MONEY & MARKETS GLOBAL

COUNTY BUSINESS

Chinas cude oil impots dop 11 pe

cent in May, knocked o top buye spot
ENERGY Country imported 23.24m tonnes

last month, behind the US close to 30m

Chinas oil imports fell about 11 per

however, expected to pick up in the
cent in May from a year ago in the
second half of the year as new commercial and strategic storage tanks
steepest drop since November 2013,
are nished. A higher number of relikely knocking the country o its
neries oine for maintenance could
perch as the worlds top crude buyer
also have dragged on crude demand in
a spot it claimed for the rst time
May. Energy Aspects estimates mainin April.
Lower imports by China, at a time
tenance to have peaked last month
when markets are expected to be overwith about 1.2 million bpd of capacity
supplied following Opecs decision to
oine, double that of April.
keep its output targets unchanged,
Data on Chinas renery output
dragged down global crude prices
will be available from the National
yesterday.
Bureau of Statistics later in June.
Chinese fuel demand saw some reChina imported 23.24 million
covery over the rst four
tonnes of crude in May,
months as a rebounding
data from the General Adoil market prompted reministration of Customs
Stong impots ners to pump at higher
showed.
This puts China behind
in the pevious rates to take advantage
margins.
the United States, which
months indicate of improving
A crude oil manager
imported just under 30
thee was a
at CNOOC Group, parent
million tonnes last month,
of CNOOC Ltd , said his
according to calculations
signicant
based on data from the U.S.
rms main 240,000-bpd
commecial
Energy Information Adminrenery has been pumpinventoy build ing at near full rates over
istration.
On a daily basis, Chinas
the past few months.
SENG YICK TEE
imports hit 5.47 million barIn April, Chinas
DIRECTOR OF SIA ENERGY
rels in May, down nearly 26
gasoline consumption
percent from Aprils record
rose 6.2 per cent and
7.37 million barrels per day (bpd).
diesel consumption rose 1.5 per cent
from year-ago levels, in implied terms
Strong imports in the previous
which does not include changes in
months indicate there was a signicant commercial inventory build, said
stocks, the National Development &
Seng Yick Tee, director of SIA Energy
Reform Commission has said.
in Beijing. In May, Chinas reneries
Higher renery throughput is
likely used crude from commercial
reected in Chinas January-May
storage, leading to lower arrivals, Tee
crude imports, which rose four per
added. Chinas appetite for crude is,
cent on year to 133.87 million tonnes,

China become a net oil product exporter in April, after being a net importer in the
rst three months. FILE

White House
denies Obama
dolla emak
A senior US ocial denied yesterday
a news wire report that President
Barack Obama had told a Group of
Seven industrial nations summit that
the strong dollar was a problem.
Bloomberg News earlier quoted a
French ocial as saying Obama had
made the comment.
The President did not state that
the strong dollar was a problem, the
US ocial said.
He made a point that he has made
previously, a number of times: that global demand is too weak and that G7
countries need to use all policy instruments, including scal policy as well
as structural reforms and monetary
policy, to promote growth.
The Bloomberg report came after a group of French reporters met
President Francois Hollande yesterday morning ahead of the second day
of the G7 summit.
The dollar fell brieng against the
euro and the Japanese yen after the
Bloomberg report, but recovered after the denial.
The leaders of the United States,
Germany, France, Britain, Italy, Japan and Canada discussed the world
economic recovery at Sundays rst
session, but ocials of other delegations said they did not focus on currencies.
-REUTERS

or 6.47 million bpd. The country accumulated some 60 million barrels of

crude surplus between January and
April, according to Reuters analysis
of ocial data.
That surplus, which could be inated due to under-reported renery runs and direct crude oil burning, compared to 48.5 million barrels

a year ago. China also imported 2.32

million tonnes of rened oil products
in May and exported 2.44 million
tonnes, indicating net fuel exports
of 12,000 tonnes. China ipped to
become a net oil product exporter in
April, after being a net importer in the
rst three months.
- REUTERS

President Barack Obama

Deutsche Bank shaes jump afte management shake-up

The appointment of John Cryan as chief
executive of Deutsche Bank sent shares
in Germanys largest lender up eight per
cent yesterday as investors judged the
Briton a more credible contender than
his two ousted predecessors to revive
its fortunes.
Cryan faces one of the most dicult jobs in global nance as he aims to
move Deutsche Bank beyond the raft of
regulatory and legal probes that have
bedevilled the bank under its current
management and execute a strategic
overhaul.
Cryan takes over from Anshu Jain
and Juergen Fitschen, Deutsches cochief executives, who announced their
resignations on Sunday, just over a
month after unveiling a cost-cutting
drive designed to arrest the banks subpar performance.
Investor scepticism with the turna-

round plan due to a lack of detail and a

poor record on meeting targets together with sta disquiet at the prospect of
thousands of job cuts heaped pressure
on the duo.
At the banks annual shareholder
meeting two weeks ago, 39 percent of
the capital represented voted against the
management board and some investors
called for Jain and Fitschen to go.
Deutsche Bank has pledged to give
more detail on its strategic revamp at
the end of next month and some investors were hopeful that Cryan, who
helped steer Swiss bank UBS through
the nancial crisis, would be able to take
more radical action than Jain, a former
investment banker who wanted Deutsche Bank to be Europes answer to Goldman Sachs.
We believe Mr Cryan will be able to
review the size and scale of the invest-

In brief
Briton John Cryan appointment
as CEO seen as positive move by
markets
He takes over from two co-executives who announced their resignations on Sunday
Resignations came a month after
launch of a cost-cutting drive at the
institution
Bank has been bedevilled by regulatory and legal probes

ment bank with a much harsher lens

than Mr Jain, said Stuart Graham, analyst at Autonomous.
The execution risk is higher than
normal at Deutsche, but so too is the investor unhappiness. We therefore expect
the shares to out-perform, at least for the

next few months, on the back of this cathartic management change.

Europes banking elite has been roiled
by the nancial crisis and its aftermath
as new regulations and a slew of scandals eat into prots. Standard Chartered
and Credit Suisse both have new chief
executives taking over this summer but
of those trio, Cryan faces the most formidable challenge.
After sticking with an expensive universal banking model during the crisis,
Deutsche Bank is now playing catch-up
with rivals in axing unprotable business lines to boost earnings and shore
up its balance sheet. Deutsches Strategy 2020 involves shrinking parts of its
investment bank and selling o its Postbank retail unit. Jain and Fitschen had
originally favored a more radical plan to
get rid of Deutsches entire retail business and become a pure investment bank

and wealth manager but they dropped

it due to regulatory hurdles and opposition from Berlin, supervisor concerns
and one trade union.
The restructuring plan unveiled in
April is meant to boost cost savings by
an annual 3.5 billion euros by 2020 and
drive a return on tangible equity, a key
measure of protability, of at least 10
percent in the same period.
But the strategy was the less radical of two options considered by Deutsches board and investors viewed it as
unambitious. Previously, the bank had
targeted a return on equity of 12 percent for 2015.
Jain will step down at the end of this
month while Fitschen will leave after
Deutsche Banks annual shareholder
meeting in May meaning Cryan, a former
chief nancial ocer at UBS, will be the
sole CEO. -REUTERS

22

BUSINESS DAILY | Tuesday June 9, 2015

MARKET DATA
Agro Commodities Market
Early Morning wholesale commodity prices Date 08-06-2015
COMMODITY
Unit
Kg
Nairobi
Mombasa
CEREAL
Dry Maize
Bag
90
3000
2900
Green Maize
Ext Bag
115
3600
6300
Finger Millet
Bag
90
7800
8100
Sorghum
Bag
90
3700
3600
Wheat
Bag
90
LEGUMES
Beans Canadian
Bag
90
7500
Beans Rosecoco
Bag
90
7300
8600
Beans Mwitemania
Bag
90
7300
8500
Mwezi Moja
Bag
90
7300
Dolichos (Njahi)
Bag
90
10500
9400
Green Gram
Bag
90
11500
10800
Cowpeas
Bag
90
7500
9900
Fresh Peas
Bag
51
3500
4500
Groundnuts
Bag
110
12800
14300
ROOTS & TUBERS
Red Irish Potatoes
Bag
50
3000
3100
White Irish Potatoes
Bag
50
3100
3600
Cassava Fresh
Bag
99
1900
1700
Sweet Potatoes
Bag
98
3200
3150
HORTICULTURE
Cabbages
Ext Bag
126
2400
4200
Cooking Bananas
Med Bunch
22
510
700
Kales
Bag
50
1300
1800
Carrots
Ext Bag
138
3800
11000
Tomatoes
Lg Box
64
6000
8200
Onions Dry
net
13
1300
1500
Spring Onions
Bag
142
1800
3800
Chillies
Bag
38
2200
2280
Cucumber
Bag
50
1600
1000
Capsicums
Bag
50
2200
2500
Brinjals
Bag
44
1600
1100
Cauliower
crate
39
2600
2300
Lettuce
Bag
51
2200
2000
FRUITS
Passion Fruits
Bag
57
4600
7500
Oranges
Bag
93
3000
3000
Lemons
Bag
95
2600
3000
Ripe Bananas
Med Bunch
14
620
480
Mangoes Local
Bag
126
2300
1250
Mangoes Ngowe
Sm Basket
25
1000
1000
Limes
net
13
900
1200
Pineapples
Dozen
13
720
960
Pawpaw
Lg Box
54
1600
800
Avocado
Bag
90
2200
3500
OTHERS
Eggs
Tray
320
360

Commodities
Kisumu

Nakuru

Eldoret

2800
3200
7200
3600

2700
2500
6300
3550

2600
1400
5850
4500
3400

8000
7800

7000
7000
4900

6750
6750

9000
12000
7200
5000
12500

8100
10350
5400
2550
12600

3500
3500
2100
2500

2400
2400

3000
2800

3000

2400

1800
450
1400
5000
7000
1400
1500
1400

1200
350
500
3200
5500
1000
1000
2000

2200
1200
1400
1800
5000
1300
1200

2200
1400

1500
1500

1500

3000
3000
1700
450
2400
1800

5000
3000
2700
750

3420
3500

500

650
2400
600

680
1500
1700

480
2500
2000

1170
1890
2100

300

280

360

13000
8000
2800
11000

Jakarta
A food vendor
sorts chillies at a
market in Jakarta.
Indonesias ination
accelerated in May
to its highest level
in ve months due
to increased food
prices, data showed,
as people stocked
up before the
Islamic holy month
of Ramadhan. AFP

African Index Weekly Commentary 8 : 06 : 2015

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

Unit Trusts
Effective date: 5th June 2015
MONEY MARKET FUND
OLD MUTUAL
BRITISH AMERICAN
CBA
UAP
ICEA
MADISON ASSET
GENCAP HELA
AMANA CAPITAL
PAN AFRICA PESA+
CIC
FIXED INCOME FUND
GENCAP HAZINA
CIC
BALANCED FUND
OLD MUTUAL / TOBOA
BRITISH AMERICAN
BA MANAGED RETIREMENT
ICEA
GENCAP ENEZA
MADISON ASSET
AMANA CAPITAL
UAP
PAN AFRICA CHAMA+
CIC
EQUITY FUND
OLD MUTUAL
OLD MUTUAL EAST AFRICA FUND
BRITISH AMERICAN
CBA
ICEA
GENCAP HISA
MADISON ASSET
AMANA CAPITAL
CIC
UAP
BOND FUND
OLD MUTUAL BOND FUND
BRITISH AMERICAN
ICEA
UAP
PAN AFRICA PATA+
SHARIAH COMPLIANT
GENCAP IMAN

Ination ises

CURRENCY
SH
SH
SH
SH
SH
SH
SH
SH
SH
SH
CURRENCY
SH
SH

DAILY YIELD
7.28%
9.86%
9.24%
10.10%
8.35%
9.39%
11.05%
10.25%
11.10%
10.71%
BUY
115.52
9.97

EFFECTIVE ANNUAL RATE

7.53%
10.37%
9.61%
10.63%
8.71%
9.80%
11.52%
10.75%
11.74%
11.32%
SELL
111.48
10.22

SH
SH
SH
SH
SH
SH
SH
SH
SH
SH

161.51
192.22
142.97
141.20
132.30
64.38
122.08
10.94
10.68
13.74

171.99
197.84
144.18
148.63
127.67
67.93
122.08
11.48
11.01
14.39

SH
SH
SH
SH
SH
SH
SH
SH
SH
SH

399.95
157.64
204.25
164.38
148.43
136.07
50.75
123.02
14.80
10.71

428.54
166.83
210.74
164.38
156.24
131.30
53.87
123.02
15.59
11.24

SH
SH
SH
SH
SH

101.89
137.50
99.29
10.10
10.19

104.31
140.31
100.29
10.63
10.51

SH

116.89

111.04

COMPANY

TICKER

SECTOR

COUNTRY

PRICE
US$

SAB MILLER
SAB SJ
BEVERAGES
ANGLO AMERICAN
AGL SJ
MINING
SASOL
SOL SJ
OIL & GAS
MTN GROUP
MTN SJ
TELECOMMUNICATIONS
STANDARD BANK
SBK SJ
BANKING & FINANCE
ANGLO PLATINUM
AMS SJ
MINING
ANGLOGOLD ASHANTI LTD
ANG SJ
MINING
TULLOW OIL PLC
TLW GN
OIL & GAS
MAROC TELECOM
IAM MC
TELECOMMUNICATIONS
DANGOTE CEMENT PLC
DANG NL
BUILDING MATERIALS
ORASCOM CONSTRUCTION
OCIC EY
CONSTRUCTION
ATTIJARIWAFA BANK
ATW MC
BANKING & FINANCE
NIGERIAN BREWERIES
NB NL
BREWERIES
BANQUE MAROCAINE DU COMMERCE BCE MC
BANKING & FINANCE
TELECOM EGYPT
ETEL EY
TELECOMMUNICATIONS
VODAFONE EGYPT
VODE EY
TELECOMMUNICATIONS
BANQUE CENTRALE POPULAIRE
BCP MC
BANKS
LAFARGE
LAC MC
BUILDING MATERIALS
DOUJA PROM ADDOHA
ADH MC
REAL ESTATE
SONATEL SN
SNTS BC
TELECOMMUNICATIONS
GUARANTY TRUST BANK
GUARANTY NL
BANKING & FINANCE
ZENITH BANK
ZENITH NL
BANKING & FINANCE
CGI
CGI MC
REAL ESTATE
GUINNESS NIGERIA PLC
GUINNES NL
BEVERAGES
COMMERCIAL INTERNATIONAL BANK CIB EY
BANKS
FIRST BANK
FIRSTBAN NL
BANKS
ABU KIR FERTILIZERS
ABUK EY
CHEMICALS
EAST AFRICAN BREWERIES
EABL KN
BREWERIES
SAFARICOM LTD
SAFCOM KN
TELECOMMUNICATIONS
MAURITIUS COMM. BANK
MCB MP
BANKING & FINANCE
MOBINIL
EMOB EY
TELECOMMUNICATIONS
T M G HOLDING
TMGH EY
REAL ESTATE
POULINA GROUP HOLDING
PGH TU HOLDING COMPANIES-DIVERS
ECOBANK TRANSNATIONAL INC
ETIT BC
BANKS
STANBIC IBTC BANK PLC
IBTCCB NL
BANKS
STATE BANK MAURITIUS
SBM MP
BANKING & FINANCE
BARCLAYS BANK KENYA
BCBL KN
BANKING & FINANCE
BANQUE DE TUNISIE
BT TU
BANKING & FINANCE
EQUITY BANK LIMITED
EQBNK KN
BANKING & FINANCE
KENYA COMM. BANK LTD
KNCB KN
BANKING & FINANCE

SOUTH AFRICA
SOUTH AFRICA
SOUTH AFRICA
SOUTH AFRICA
SOUTH AFRICA
SOUTH AFRICA
SOUTH AFRICA
GHANA
MOROCCO
NIGERIA
EGYPT
MOROCCO
NIGERIA
MOROCCO
EGYPT
EGYPT
MOROCCO
MOROCCO
MOROCCO
BRVM
NIGERIA
NIGERIA
MOROCCO
NIGERIA
EGYPT
NIGERIA
EGYPT
KENYA
KENYA
MAURITIUS
EGYPT
EGYPT
TUNISIA
BRVM
NIGERIA
MAURITIUS
KENYA
TUNISIA
KENYA
KENYA

52.28
15.86
35.09
17.49
12.66
22.98
8.93
8.10
12.00
0.89
37.36
36.62
0.98
23.34
1.13
9.80
23.44
190.64
3.15
42.74
0.14
0.10
74.00
0.83
7.45
0.05
22.34
3.33
0.17
7.21
15.05
1.27
2.70
0.09
0.15
0.03
0.16
5.67
0.50
0.62

PRICE
CHANGE*
-4.6%
0.5%
-1.3%
-2.2%
-6.8%
-4.9%
-4.6%
-1.0%
1.4%
-2.7%
0.0%
2.9%
-2.4%
5.9%
-5.1%
0.0%
2.5%
9.8%
3.3%
9.2%
-6.0%
-7.8%
2.5%
0.2%
0.6%
-5.0%
5.9%
7.8%
6.9%
0.0%
1.9%
-4.4%
2.0%
2.0%
-4.2%
1.3%
0.7%
2.8%
1.1%
5.2%

MKT CAP
US$MN

P/E

83,858.54
22,156.38
23,821.25
31,865.38
20,486.66
6,136.06
3,609.09
7,331.46
10,544.90
15,217.81
7,729.80
6,957.91
7,385.83
4,188.12
1,920.68
2,352.68
4,058.56
3,336.14
1,015.37
4,274.48
4,083.54
3,163.36
1,362.26
1,253.64
6,769.52
1,629.95
1,879.77
2,629.95
6,916.28
1,768.74
1,504.86
2,614.71
485.96
1,631.66
1,460.65
969.61
877.48
850.51
1,847.20
1,884.49

19.6
5.7
10.3
14.3
11.5
20.8
12.4
294.6
16.6
16.5
-39.6
15.0
28.4
55.7
6.9
7.4
14.5
20.3
5.2
12.9
7.8
6.2
35.0
89.3
12.8
4.6
11.0
37.0
20.2
12.4
-42.1
27.4
14.0
5.0
9.4
9.8
15.8
10.0
10.3

SHARES IN
ISSUE MN
1,604.0
1,396.7
678.9
1,822.2
1,618.4
267.0
404.0
904.9
879.1
17,040.5
206.9
190.0
7,562.6
179.5
1,707.1
240.0
173.1
17.5
322.6
100.0
29,431.2
31,396.0
18.4
1,505.9
908.2
35,895.2
84.1
790.8
40,065.4
237.8
100.0
2,063.6
180.0
17,212.2
10,000.0
31,000.0
5,432.0
150.0
3,702.8
3,025.2

Global Commodity Prices

Effective date: 8th June 2015
METALS & MINING

SOFTS
COMMODITY

CURRENCY LAST NET CHNG

SYMBOL CURRENCY

OIL& GAS
LAST

NET CHG

SYMBOL

CURRENCY

LAST

NET CHG

SUGAR NO5

USD

350.90

0.20

100 OZ GOLD

USD

1174.00

6.20

LIGHT CRUDE

USD

58.54

-0.59

COFFEE

USD

162.30

-19.45

SILVER

JPY

64.00

0.00

NO 2 HT OIL

USD

1.86

-0.01

COCOA

USD

3114.00

-2.00

HG COPPER

USC

2.72

0.01

BRENT CRUDE

USD

62.88

-0.43

RUBBER

JPY

224.00

-2.00

PLATINUM

JPY

4436.00

2.00

GAS OIL

USD

573.00

6.25

FROZEN OJ CON1 USC

116.80

2.90

ALUMINIUM

CNY

12860.00

-80.00

NATURAL GAS

USD

2.64

0.05

COTTON NO2

64.53

0.52

PALLADIUM

JPY

3050.00

-29.00

KEROSINE

JPY

59700.00

990.00

USC

Tuesday June 9, 2015 | BUSINESS DAILY

23

MARKETDATA
DATA
MARKET

Expots fall as
weak demand
huts global
ion oe pices
Exports in the worlds second largest
economy, China, fell for a third consecutive month in May, highlighting
slowing demand in the country.
Exports fell 2.5 per cent from
a year ago in dollar denominated
terms, and 2.8 per cent in yuan denominated gures.
Both gures were above expectations, but the slide in imports has
sparked worries on the domestic end.
Imports tumbled 17.6 per cent in dollar terms, while yuan-denominated
imports plunged 18.1 per cent - falling
for the seventh month.
Zhu Haibin, economist at JP Morgan said Mondays data shows that
the economy will struggle to meet
the governments trade growth target
even with the export rise.
Imports are still much weaker
than expected. Exports are doing
ne, even though we are still talking about a year-on-year decline,
but in terms of momentum theyve
rebounded a bit after the collapse in
March, he told Reuters.
This year the government set up
the target of trade growth at six per
cent, which at this moment, is still
impossible to achieve, particularly
with the weak imports.

ACTIVE COUNTERS
KCB

Sasini
Kenya

15.95
0.00%

Jan 14

May15
0.54
29.54
1.57%

Earnings per share

Price to earnings ratio (p/e)
Dividend Yield

Bamburi
Uchumi
Kenya

58.50
-0.85%

Jan 14

5.63
10.39
3.42%

Earnings per share

Price to earnings ratio (p/e)
Dividend Yield

EABL
Kengen

244.00
9.00
7.49%
-0.55%

Jan 14

May15

Kenya

Dividend
Yield
Dividend
Yield

May15

CKenya
& G Power
Kenya

33.21
8.40
6.09%

Earningsper
pershare
share
1.29
8.82 Earnings
Pricetotoearnings
earningsratio
ratio(p/e)
(p/e)
6.98
27.66 Price
DividendYield
Yield
4.44%
2.25% Dividend

May15

Earnings per share

Price to earnings ratio (p/e)
Dividend Yield

Centum
Invest
Kenya
Airways
Kenya
Kenya

May15

Kenya

6.90
-1.43%

Jan 14

30.25
17.25
-3.20%
2.37%

Jan 14

ARM Cement

Kenya

279.00
0.00%

Earnings per share

Price to earnings ratio (p/e)
Dividend Yield

May15

9.801.35 Earnings
Earnings
share
perper
share
13.93
14.90
Price
to earnings
ratio
(p/e)
Price
to earnings
ratio
(p/e)
1.60%
8.22%

Earnings
share
Earnings
perper
share
Price
to earnings
ratio
(p/e)
Price
to earnings
ratio
(p/e)
Dividend
Yield
Dividend
Yield

KQ

Stan Chart

Jan 14

May15

146.0018.80 Kenya
Kenya
-0.68%
2.17%

Kenya

Jan 14

Kenya

Jan 14

Jan 14

-2.25
-3.07
0.00%

May15

Earnings per share

Price to earnings ratio (p/e)
Dividend Yield

EABL
KPLC
Kenya

11.75
61.50
0.00%
0.00%

May15

per share
3.317.48 Earnings
Earnings per share
Price to earnings ratio (p/e)
5.214.04 Price to earnings ratio (p/e)
Yield
2.64% Dividend
Dividend Yield
2.90%

70.50
-3.42%

3.01
23.42
0.85%

14.45
313.00
0.35%
-0.63%

Jan 14

May15

-6.35
per share
4.54 Earnings
Earnings
per share
-1.85
to earnings
ratioratio
(p/e)(p/e)
to earnings
13.55 PricePrice
0.00%
YieldYield
Dividend
0.00% Dividend

2.23
8.21
6.48
38.12
0.00%
1.76%

Weak
Domestic demand in China continues
to be weak despite stimulus measures
by the government and central bank
to boost growth.
The central bank had lowered interest rates just last month, which
was the third time in six months
to spur lending and economic activity.
Meanwhile, iron ore import prices have dropped signicantly due to
slower crude steel production in China and an uptick in supplies resulting
from higher ore output in resourceproducing countries.
Prices for imported iron ore into
Japan are determined quarterly
based on average daily spot prices.
The price major steelmakers such as
Nippon Steel & Sumitomo Metal and
JFE Steel will pay for purchases from
Anglo-Australian resource company
Rio Tinto during the July-September
quarter has been set at $52 a ton, $10
less than the prior quarter.
The newly set price represents a
more than 16 per cent drop from the
same period a year ago and is 70 per
cent less than the recent peak in 2011.
The price is now sitting at the lowest level in around eight years and
is the cheapest since the quarterly
price-determination system was
implemented in scal 2010.
One reason for the decline is
that supply-demand conditions are
easing internationally.
- REUTERS

Tracking the markets: Benchmark Index (Latest Data)

Africa
JSE All Share Index
South Africa

USE All Share

DSE All Share

Uganda

May15

Jan 14

May15

Rwanda

135.77
-0.21%

33,600.37
-0.19%

2,798.27
-1.55%

Jan 14

RSE All Share

Nigeria

1,960.00
-0.76%

51,616.82
-0.15%

Jan 14

NGSE All share

Tanzania

May15

Jan 14

Jan 14

May15

May15

World
DJ Industrial

Xetra Dax
11,150.18
-0.42%

17,849.46
-0.31%

Jan 14

May15

Jan 14

Nikkei

HangSeng

Frankfurt

New York

May15

May15

Mumbai
20,457.19
-0.02%

27,316.28
0.21%

Jan 14

Sensex

Tokyo

Hongkong

Jan 14

May15

26,634.76
-0.50%

Jan 14

May15

24

BUSINESS DAILY | Tuesday June 9, 2015

MARKET DATA
African Indices

Nairobi Stocks

NAME

NSE 20 Share Index

4,761.44
-0.47%

Nairobi

LAST

KENYA

4,761.44

-22.63

LUSE ALL SHARE INDEX

JSE ALL SHARE INDEX

5,600.00
5,500.00
5,400.00
5,300.00
5,200.00
5,100.00
5,000.00
4,900.00
4,800.00
4,700.00

LOCATION

NSE 20 - SHR IDX

ALSIUG

180.00
178.00
176.00
174.00
172.00
170.00
168.00
166.00
164.00
162.00
160.00
Jan 15

May 15

FTSE Pan African Index

1,220.60
0.00%

Nairobi
1320.00
1300.00
1280.00
1260.00
1240.00
1220.00
1200.00
Jan 15

May 15

Active
Active Counters
Counters
Price fri
Prev

Total Shares

Change

Traded

11,190,800

Safaricom

16.10

16.35

-1.53%

Nairobi Sec Ex

20.50

21.00

-2.38%

7,032,900

8.30

8.40

-1.19%

2,081,900

Equity

47.00

47.25

-0.53%

1,733,400

Kenya Power

17.25

16.85

2.37%

1,367,200

KenolKobil

Gainers
Price fri
Counter

Price fri

Net

last

Prev

CFC Stanbic

108.00

102.00

BOC Gases

127.00

120.00

7.00

5.83%

Express (K)

5.85

5.60

0.25

4.46%

Change

Chng

6.00

5.88%

Atlas Dev

11.10

10.70

0.40

3.74%

Kenya Power

17.25

16.85

0.40

2.37%

Losers
Counter

price fri
Last

price fri
Prev

Net
Change

%
Chng

Pan Africa

74.50

80.00

-5.50

-6.88%

Scangroup

37.25

39.00

-1.75

-4.49%

ARM Cement ltd

70.50

73.00

-2.50

-3.42%

EAPC

57.00

59.00

-2.00

-3.39%

7.85

8.05

-0.20

-2.48%

CIC Insurance

CLOSE

4,784.07

4,784.07

5,845.57

0.00

0.00%

5,845.57

5,845.57

5,845.57

5,845.57

-77.43

-0.15%

51,543.94

51,675.23

51,365.17

51,694.25

UGANDA

1,960.00

ZSE INDUSTRIAL

ZIMBABWE

153.44

CFG INDEX

-15.00

-0.76%

1,975.00

1,975.00

1,975.00

1,975.00

-0.05

-0.03%

153.49

153.49

153.49

153.49

MOROCCO

20,470.29

-53.03

-0.26%

20,515.12

20,528.03

20,460.17

20,523.32

MALAWI ALL SHR

MALAWI

16,001.03

0.00

0.00%

16,001.03

16,001.03

16,001.03

16,001.03

DSE ALL SHR IDX

TANZANIA

2,798.27

-44.09

-1.55%

2,842.36

2,842.36

2,842.36

2,842.36

NIGERIA

33,600.37

-64.54

-0.19%

33,664.91

33,694.26

33,593.10

33,664.91

RSE ALLSHARE IND

162.53
-0.76%

Nairobi

Last

LOW

4,784.07

EGYPT

8,672.33

-56.54

-0.65%

8,733.05

8,766.90

8,672.33

8,728.87

TUNISIA

5,647.31

-3.38

-0.06%

5,650.83

5,662.54

5,641.44

5,650.69

RWANDA

135.77

-0.29

-0.21%

135.77

135.77

135.77

136.06

Daily Share Report

All Share Index (NASI)

Price fri

HIGH

4,784.07

51,616.82

TUN MAIN INDEX

Counter

OPEN

-0.47%

ZAMBIA

EGX 30 IDX/D

May 15

PCT.CHNG

SOUTH AFRICA

NSE ALL SHARE/D

Jan 15

NET.CHNG

MARKET UPDATES

52 WK
HIGH
AGRICULTURAL
100.00
EAAGADS
346.00
KAKUZI
180.00
KAPCHORUA TEA
1,185.00
LIMURU TEA
27.50
REA VIPINGO
18.50
SASINI
319.00
WILLIAMSON TEA
AUTOMOBILES & ACCESSORIES
62.00
CAR & GEN
13.60
MARSHALLS
9.40
SAMEER
BANKING
18.45
BARCLAYS
155.00
CFC STANBIC
280.00
DTBK
63.00
EQUITY
55.00
HF
147.00
I&M HOLDINGS
65.50
KCB
34.00
NBK
85.00
NIC BANK
357.00
STAN. CHART.
25.00
CO-OP BANK
COMMERCIAL
ATLAS DEV & SUPPT SERV LTD 13.75
8.50
EXPRESS (K)
20.25
HUTCHINGS BIEMER
13.50
KQ
30.75
LONGHORN PUBLISHERS
325.00
NATION MEDIA
247.00
SCANGROUP
47.50
STANDARD GRP
49.50
TPS EA
15.60
UCHUMI
CONSTRUCTION & ALLIED
95.00
ARM CEMENT LTD
206.00
BAMBURI
170.00
CROWN BERGER
17.00
EA CABLES
110.00
EAPC
ENERGY & PETROLEUM
13.15
KENGEN
10.50
KENOLKOBIL
18.50
KENYA POWER
32.00
TOTAL
23.00
UMEME
INSURANCE
40.00
BRITISH AMERICAN
12.40
CIC INSURANCE
599.00
JUBILEE
21.00
KENYA RE
26.00
LIBERTY KENYA
142.00
PAN AFRICA
INVESTMENT
84.50
CENTUM INVEST.
5.80
HOME AFRICA
KURWITU VENTURES LTD 1,500.00
10.85
OLYMPIA
30.00
TRANSCENTURY
INVESTMENT SERVICES
NAIROBI SECURITIES EXCHG 28.00
MANUFACTURING & ALLIED
11.10
A. BAUMANN
165.00
BOC GASES
1,050.00
BAT KENYA
37.00
CARBACID
355.00
EABL
5.35
EVEREADY EA
FLAME TREE GROUP HOLDINGS 14.00
192.00
K. ORCHARDS
3.85
MUMIAS
56.50
UNGA
TELECOMMUNICATION & TECHNOLOGY
SAFARICOM
17.90

52 WK
LOW

YTD
%

VWA
LAST
PRICE

VWA
PREV
PRICE

DAILY
PRICE
CHANGE

DAILY
TRADED
SHARES

26.00
110.00
120.00
620.00
27.50
11.50
240.00

-28.57%
65.00%
-5.11%
23.22%
0.00%
24.12%
8.87%

30.00
297.00
130.00
950.00
27.50
15.95
270.00

30.00
297.00
130.00
950.00
27.50
15.95
270.00

0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%

1,300
800

MKT CAP.
KSHS

EPS
LATEST
12MNTH

P/E
TRAILING

PBV
TRAILING

DPS
LATEST
12MNTH

TOTAL
DIVIDEND
YIELD

32,157,000
964,710,000.0
19,599,999 5,821,199,703.0
3,912,000
508,560,000.0
1,200,000 1,140,000,000.0
60,000,000 1,650,000,000.0
228,055,500 3,637,485,225.0
8,756,320 2,364,206,400.0

-1.30
8.17
32.21
-0.28
5.85
0.54
81.36

-23.08
36.35
4.04
-3,392.86
4.70
29.54
3.32

2.40
2.01
0.37
4.63
0.74
0.58
0.37

0.00
3.75
5.00
1.00
0.00
0.25
7.00

0.00%
1.26%
3.85%
0.11%
0.00%
1.57%
2.59%

31.00
8.00
4.75

-23.15%
21.43%
-14.17%

41.50
11.90
5.20

41.50
11.90
5.15

0.00%
0.00%
0.97%

100
11,800

40,103,308
14,393,106
278,342,393

1,664,287,282.0
171,277,961.4
1,447,380,443.6

6.57
-11.90
-0.24

6.32
-1.00
-21.67

0.80
0.44
0.62

0.60
0.00
0.00

1.45%
0.00%
0.00%

15.00
101.00
216.00
31.00
29.00
116.00
42.25
19.00
50.50
265.00
17.10

-8.38%
-17.74%
-3.40%
-5.50%
-34.97%
-4.88%
3.51%
-19.19%
-10.43%
-16.72%
8.75%

15.35
108.00
226.00
47.00
29.75
116.00
58.50
20.00
51.00
279.00
21.50

15.30
102.00
227.00
47.25
29.75
117.00
59.00
20.00
51.50
279.00
21.75

0.33%
5.88%
-0.44%
-0.53%
0.00%
-0.85%
-0.85%
0.00%
-0.97%
0.00%
-1.15%

391,100
1,100
39,600
1,733,400
7,500
23,600
691,300
2,900
34,000
1,400
224,500

5,431,536,000
395,321,638
242,110,105
3,702,777,020
352,416,667
392,362,039
2,984,227,692
308,000,000
639,945,603
309,159,514
4,889,316,295

83,374,077,600.0
42,694,736,904.0
54,716,883,730.0
174,030,519,940.0
10,484,395,843.3
45,513,996,524.0
174,577,319,982.0
6,160,000,000.0
32,637,225,753.0
86,255,504,406.0
105,120,300,342.5

1.54
14.38
21.92
4.55
4.21
13.56
5.63
3.11
7.07
33.21
1.64

9.97
7.51
10.31
10.33
7.07
8.55
10.39
6.43
7.21
8.40
13.11

2.58
1.85
2.37
3.38
1.15
2.08
2.73
0.46
1.57
2.38
2.45

1.00
6.15
2.40
1.80
1.50
2.90
2.00
0.00
1.00
17.00
0.50

6.51%
5.69%
1.06%
3.83%
5.04%
2.50%
3.42%
0.00%
1.96%
6.09%
2.33%

10.00
4.15
20.25
6.40
6.80
194.00
35.25
26.25
32.00
8.00

-9.68%
0.00%
-19.54%
-24.32%
-26.24%
-13.81%
4.32%
-8.78%
4.98%

11.10
5.85
20.25
6.90
7.15
193.00
37.25
36.50
33.75
10.55

10.70
5.60
20.25
7.00
7.00
194.00
39.00
36.25
33.75
10.55

3.74%
4.46%
0.00%
-1.43%
2.14%
-0.52%
-4.49%
0.69%
0.00%
0.00%

1,300
70,700
439,200
29,800
6,500
10,700
200
1,500
22,500

433,063,193 4,807,001,442.3
35,403,790
207,112,171.5
360,000
7,290,000.0
1,496,469,035 10,325,636,341.5
243,750,000 1,742,812,500.0
188,542,286 36,388,661,198.0
378,865,102 14,112,725,049.5
81,731,808 2,983,210,992.0
182,174,108 6,148,376,145.0
364,959,616 3,850,323,948.8

-0.04
-2.18
-18.34
-2.25
1.62
13.10
1.50
2.57
1.35
1.45

-277.50
-2.68
-1.10
-3.07
4.41
14.73
24.83
14.20
25.00
7.28

1.04
3.30
0.96
4.45
1.72
1.64
0.56
0.96

0.00
0.00
0.00
0.00
2.00
10.00
0.00
0.50
1.35
0.30

0.00%
0.00%
0.00%
0.00%
27.97%
5.18%
0.00%
1.37%
4.00%
2.84%

72.00
135.00
83.00
13.50
51.00

-15.12%
5.76%
47.75%
-8.33%
1.72%

70.50
146.00
164.00
14.65
57.00

73.00
147.00
164.00
14.85
59.00

-3.42%
-0.68%
0.00%
-1.35%
-3.39%

3,100
1,300
700
3,600
500

495,275,000 34,916,887,500.0
362,959,275 52,992,054,150.0
23,727,000 3,891,228,000.0
253,125,000 3,708,281,250.0
90,000,000 5,130,000,000.0

3.01
9.80
9.01
1.37
-4.30

23.42
14.90
18.20
10.69
-13.26

4.30
1.83
2.86
1.54
1.06

0.60
12.00
1.75
1.00
0.00

0.85%
8.22%
1.07%
6.83%
0.00%

8.70
7.90
12.85
21.00
13.00

-12.14%
-3.45%
16.61%
-6.25%
-16.67%

9.00
8.30
17.25
23.00
17.50

9.05
8.40
16.85
22.50
17.50

-0.55%
-1.19%
2.37%
2.22%
0.00%

207,000
2,081,900
1,367,200
300

2,198,361,456 19,785,253,104.0
1,471,761,200 12,215,617,960.0
1,951,467,045 33,662,806,526.3
175,028,706 4,025,660,238.0
1,623,878,005 28,417,865,087.5

1.29
0.74
3.31
2.26
1.34

6.98
11.22
5.21
10.18
13.02

0.29
1.83
0.77
0.79
3.10

0.40
0.20
0.50
0.70
0.90

4.44%
2.41%
2.90%
3.04%
5.16%

16.40
7.50
301.00
15.45
15.10
72.00

-26.05%
-16.15%
23.11%
-0.29%
5.38%
-33.33%

22.25
7.85
553.00
17.00
24.50
74.50

22.00
8.05
554.00
17.00
24.50
80.00

1.14%
-2.48%
-0.18%
0.00%
0.00%
-6.88%

105,100
45,000
4,600
17,000
1,500
1,400

1,938,415,838 43,129,752,395.5
2,615,538,528 20,531,977,444.8
59,895,000 33,121,935,000.0
699,949,068 11,899,134,156.0
535,707,499 13,124,833,725.5
96,000,000 7,152,000,000.0

1.31
0.43
48.00
4.48
2.14
9.07

16.98
18.26
11.52
3.79
11.45
8.21

2.49
2.54
3.10
0.66
2.48
2.14

0.30
0.10
8.50
0.70
0.50
0.00

1.35%
1.27%
1.54%
4.12%
2.04%
0.00%

35.00
2.80
1,500.00
2.50
12.50

0.82%
-28.05%
-1.92%
-32.82%

61.50
2.95
1,500.00
5.10
13.00

61.50
2.95
1,500.00
5.10
13.00

0.00%
0.00%
0.00%
0.00%
0.00%

376,500
31,000
28,900
21,900

665,441,775 40,924,669,162.5
405,255,320 1,195,503,194.0
102,272
153,408,000.0
40,000,000
204,000,000.0
280,284,476 3,643,698,188.0

4.54
-0.04
-62.40
0.38
-8.53

13.55
-73.75
-24.04
13.42
-1.52

2.02
0.26
0.69

0.00
0.00
0.00
0.00
0.00

0.00%
0.00%
0.00%
0.00%
0.00%

20.50

21.00

-2.38%

7,032,900

3,989,812,500.0

2.13

9.62

5.47

0.38

1.85%

1.70
9.34
2.73
9.06
2.66

0.00%
4.09%
6.01%
1.69%
1.76%
0.00%
0.00%
0.00%
0.00%
1.71%
3.98%

15.00

2,000

SHARES
ISSUED

194,625,000

11.10
120.00
521.00
17.50
250.00
2.65
7.15
4.40
1.35
22.00

0.00%
-4.00%
-20.70%
-18.16%
2.27%
9.46%
-9.09%
0.00%
12.58%

11.10
127.00
707.00
17.70
313.00
4.10
7.90
100.00
1.95
43.75

11.10
120.00
720.00
17.80
315.00
4.05
8.10
100.00
1.95
44.75

0.00%
5.83%
-1.81%
-0.56%
-0.63%
1.23%
-2.47%
0.00%
0.00%
-2.23%

2,000
200
52,200
14,000
20,000
26,700
1,083,500
22,500

3,840,066
42,624,732.6
19,525,446 2,479,731,642.0
100,000,000 70,700,000,000.0
254,851,988 4,510,880,187.6
790,774,356 247,512,373,428.0
210,000,000
861,000,000.0
161,866,804
1,278,747,751.6
12,868,124 1,286,812,400.0
1,530,000,000 2,983,500,000.0
75,708,873 3,312,263,193.8

-2.02
11.76
42.55
1.93
8.21
-0.85
0.99
0.15
-1.77
3.65

-5.50
10.80
16.62
9.17
38.12
-4.82
7.98
666.67
-1.10
11.99

526.32
0.28
0.71

0.00
5.20
42.50
0.30
5.50
0.00
0.00
0.00
0.00
0.75

11.75

16.37%

16.10

16.35

-1.53%

11,190,800

40,065,428,000 645,053,390,800.0

0.80

20.13

8.05

0.64

TO RECEIVE NATIONMOBILE ALERTS ON YOUR CELLPHONE, SMS THE STOCK YOU WANT, E.G. STOCKS KENGEN, TO 20667.
6667. EACH
EACHALERT
ALERTCOSTS
COSTSSH5
SH5ABOVE
ABOVENORMAL
NORMALRATES.
RATES.

Tuesday June 9, 2015 | BUSINESS DAILY

MARKET DATA

MARKET DATA
Equities & Bonds
Kenya Treasury and Infrastructure Bonds

Share Price Performance Scorecard

SCORECARD AS AT 8TH JUNE 2015
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
REA VIPINGO
SAFARICOM
SAMEER AFRICA
SASINI
SCANGROUP
STANDARD GRP
STD CHART KEN
TOTAL KENYA
TPS (EA)
TRANSCENTURY
UCHUMI SUPER
UNGA GROUP

25

PREVIOUS
11.10
10.70
73.00
147.00
15.30
720.00
120.00
22.00
41.50
17.80
61.50
102.00
8.05
21.75
164.00
227.00
14.85
59.00
30.00
315.00
47.25
4.05
5.60
8.10
270.00
20.25
2.95
29.75
117.00
554.00
297.00
130.00
100.00
9.05
7.00
59.00
8.40
16.85
17.00
1500.00
24.50
950.00
7.00
11.90
1.95
21.00
194.00
20.00
51.50
5.10
80.00
27.50
16.35
5.15
15.95
39.00
36.25
279.00
22.50
33.75
13.00
10.55
44.75

CLOSE
11.10
11.10
70.50
146.00
15.35
707.00
127.00
22.25
41.50
17.70
61.50
108.00
7.85
21.50
164.00
226.00
14.65
57.00
30.00
313.00
47.00
4.10
5.85
7.90
270.00
20.25
2.95
29.75
116.00
553.00
297.00
130.00
100.00
9.00
6.90
58.50
8.30
17.25
17.00
1500.00
24.50
950.00
7.15
11.90
1.95
20.50
193.00
20.00
51.00
5.10
74.50
27.50
16.10
5.20
15.95
37.25
36.50
279.00
23.00
33.75
13.00
10.55
43.75

% 1D
0.00
3.74
-3.42
-0.68
0.33
-1.81
5.83
1.14
0.00
-0.56
0.00
5.88
-2.48
-1.15
0.00
-0.44
-1.35
-3.39
0.00
-0.63
-0.53
1.23
4.46
-2.47
0.00
0.00
0.00
0.00
-0.85
-0.18
0.00
0.00
0.00
-0.55
-1.43
-0.85
-1.19
2.37
0.00
0.00
0.00
0.00
2.14
0.00
0.00
-2.38
-0.52
0.00
-0.97
0.00
-6.88
0.00
-1.53
0.97
0.00
-4.49
0.69
0.00
2.22
0.00
0.00
0.00
-2.23

% 5D
0.00
0.00
-3.42
-0.68
0.00
-8.42
5.83
0.00
0.00
-2.75
1.65
4.85
-5.42
-2.27
1.86
0.00
-1.35
-3.39
-6.25
4.33
-0.53
-7.87
4.46
-9.20
-1.46
0.00
-3.28
-2.46
-0.85
-3.66
8.79
0.00
-4.76
-1.64
-2.13
3.54
-3.49
6.81
0.29
0.00
-1.01
0.00
2.88
0.00
-2.50
-3.53
-1.03
-4.76
-0.97
2.00
-6.88
0.00
1.58
1.96
3.91
-4.49
9.77
-7.62
-2.13
0.75
0.00
-1.86
-1.13

% 1M
0.00
3.26
-12.42
-2.67
-3.76
-2.62
-2.31
-10.10
-14.87
-11.50
-5.38
-12.20
-15.14
0.00
18.84
-5.83
-5.79
5.56
-16.67
-2.49
1.08
2.50
0.00
-5.95
-1.46
0.00
-4.84
-9.16
-13.43
-5.31
-1.00
4.00
-4.76
-6.74
-2.82
-3.31
-7.78
-0.29
-0.58
0.00
6.52
0.00
-8.33
-0.83
-2.50
6.22
-12.27
-2.44
-13.56
-3.77
-39.43
0.00
-5.57
-0.95
-4.78
-12.87
-6.41
-12.81
-3.16
-3.57
-7.47
-1.86
-0.57

% 3M
0.00
-3.48
-16.07
-8.75
-8.63
-16.73
-6.62
-22.61
-22.43
-27.01
3.36
-16.28
-30.53
3.61
20.59
-7.76
-9.85
-5.00
-20.00
4.68
-8.74
-3.53
-4.88
-9.71
-1.46
0.00
-16.90
-22.73
-7.94
2.41
-10.00
-7.80
-10.71
-23.73
-29.23
-0.85
-17.00
-3.09
-8.11
0.00
1.03
-14.72
-22.28
-2.46
-27.78
3.80
-16.09
-21.57
-19.05
-15.00
-43.56
0.00
1.90
-19.38
1.92
-22.40
-15.12
-20.74
-18.58
-0.74
-27.78
-3.21
-8.38

% 6M
0.00
-15.06
-2.01
-8.90
-25.58
-14.77
-18.35
-15.31
-21.33
2.50
-14.29
-16.49
20.11
36.67
-2.59
-5.48
-5.00
-28.57
-3.69
-7.84
10.81
-3.31
-3.07
6.72
0.00
0.00
-35.68
-7.94
28.90
44.88
-5.11
-15.25
-18.18
-25.41
0.86
-8.29
13.49
1.49
0.00
8.89
-9.26
-29.90
19.60
8.33
-4.65
-31.80
-20.00
-22.14
-13.56
-35.22
0.00
7.33
-16.80
24.61
-15.34
-11.52
-17.70
-11.54
-6.90
0.00
12.83
10.76

% 1Y
0.00
-11.88
-15.12
-9.44
18.03
-12.41
26.78
3.75
-41.49
59.74
-18.80
0.00
2.38
75.40
-5.04
1.38
-25.97
-0.83
11.39
12.57
12.33
-25.48
-3.57
0.00
0.00
-22.22
0.00
56.21
98.00
-16.67
958.20
-9.55
-36.41
18.78
-7.78
25.00
-10.05
38.03
41.79
-48.93
23.96
-33.90
-38.14
-33.33
-12.07
5.15
-43.56
0.00
25.78
-33.76
-2.15
-21.16
11.45
-9.71
-11.54
-5.59
0.00
-15.94
36.72

Corporate Bonds

BONDS LISTED AT THE NAIROBI SECURITIES EXCHANGE

ISSUE

MATURITY ISSUED VALUE

DATE

DATE

IN MILLIONS

JUNE 8, 2015
COUPON
(%)

ISSUE NO.

TRADED

PREVIOUS

YIELD

PRICE

(%)

(%)

TOTAL
VALUE TRADED
(KSHS)

TWO YEAR BONDS

FXD 3/2013/2YR

26-AUG-13

24-AUG-15

17,927.40

12.9390

100.8908

FXD 4/2013/2YR

24-DEC-13

21-DEC-15

25,251.00

11.5530

100.6244

FXD 1/2014/2YR

24-MAR-14

21-MAR-16

20,000.00

10.8030

100.1407

FXD 2/2014/2YR

26-MAY-14

23-MAY-16

20,130.15

10.7930

100.0910

FXD 3/2014/2YR

25-MAY-15

22-MAY-17

20,223.35

10.8900

100.0518

FXD 1/2015/2YR

23-JAN-15

20-FEB-17

23,592.55

11.4700

101.0594

FXD 2/2010/5YR

30-NOV-10

23-NOV-15

14,973.10

6.6710

98.3029

FXD 1/2011/5YR

31-JAN-11

25-JAN-16

22,083.10

7.6360

98.1667

FXD 1/2012/5YR

28-MAY-12

22-MAY-17

31,079.55

11.8550

101.5915

FIVE YEAR BONDS

FXD 1/2013/5YR

29-APR-13

23-APR-18

20,240.75

12.8920

103.3070

FXD 2/2013/5YR

1-JUL-13

25-JUN-18

26,340.05

11.3050

100.3825

FXD 3/2013/5YR

25-NOV-13

19-NOV-18

14,937.80

11.9520

103.1543

FXD 1/2014/ 5YR

28-APR-14

22-APR-19

25,540.95

10.8700

98.6378

FXD 2/2014/ 5YR

23-JUN-14

17-JUN-19

16,418.25

11.9340

100.1485

TEN YEAR BONDS

FXD 1/2006/10YR

27-MAR-06

14-MAR-16

3,451.05

14.0000

102.1563

FXD 2/2006/10YR

29-MAY-06

16-MAY-16

5,028.10

14.0000

102.8875

FXD 1/2007/10YR

29-OCT-07

16-OCT-17

9,308.80

10.7500

99.3880

FXD 1/2008/10YR

29-OCT-07

16-OCT-17

2,992.75

10.7500

99.3434

FXD 2/2008/10YR

28-JUL-08

16-JUL-18

13,504.70

10.7500

99.3210

FXD 3/2008/10YR

29-SEP-08

28-SEP-18

4,151.60

10.7500

99.2873

FXD 1/2009/10YR

27-SEP-09

15-APR-19

4,966.85

10.7500

96.5948

FXD 1/2010/10YR

26-APR-10

13-APR-20

19,394.15

8.7900

88.2760

FXD 2/2010/10YR

1-NOV-10

19-OCT-20

18,849.90

9.3070

90.0522

FXD 1/2012/10YR

25-JUN-12

13-JUN-22

16,803.75

12.7050

100.6934

FXD 1/2013/10YR

1-JUL-13

19-JUN-23

12,643.05

12.3710

100.1011

FXD 1/2013/10YR

1-JUL-13

19-JUN-23

12,643.05

12.3710

FXD 1/2014/10YR

25-MAY-15

26-MAY-25

5,063.88

12.1800

12.8900

96.7751

107,000,000

FXD 1/2014/10YR

25-MAY-15

26-MAY-25

5,063.88

12.1800

12.8000

96.7751

50,000,000

25-SEP-06

11-SEP-17

4,031.40

13.7500

FXD1/2006/12YR

28-AUG-06

13-AUG-18

3,900.95

14.0000

105.2139

FXD1/2007/12YR

28-MAY-07

13-MAY-19

4,864.60

13.0000

105.6743

FXD1/2007/15YR

26-MAR-07

7-MAR-22

3,654.60

14.5000

109.0397

FXD2/2007/15YR

25-JUN-07

6-JUN-22

7,236.95

13.5000

105.5567

FXD3/2007/15YR

26-NOV-07

7-NOV-22

17,568.00

12.5000

99.4295

FXD1/2008/15YR

31-MAR-08

13-MAR-23

7,830.90

12.5000

100.6070

FXD1/2009/15YR

26-OCT-09

7-OCT-24

9,420.45

12.5000

102.7808

FXD1/2010/15YR

29-MAR-10

10-MAR-25

20,823.73

10.2500

88.1557

FXD2/2010/15YR

25-APR-11

8-DEC-25

13,513.10

9.0000

79.3778

FXD1/2012/15YR

24-SEP-12

6-SEP-27

21,089.45

11.0000

89.6086

FXD1/2013/15YR

25-FEB-13

7-FEB-28

40,886.33

11.2500

90.8906

FXD2/2013/15YR

29-APR-13

10-APR-28

17,385.85

12.0000

95.7054

FXD1/2008/20YR

30-JUN-08

5-JUN-28

20,360.95

13.7500

106.2954

FXD1/2011/20YR

30-MAY-11

5-MAY-31

9,365.80

10.0000

FXD1/2012/20YR

26-NOV-12

1-NOV-32

43,082.72

12.0000

13.2845

91.2510

100,000,000

FXD1/2012/20YR

26-NOV-12

1-NOV-32

43,082.72

12.0000

13.3650

91.2510

300,000,000

28-JUN-10

28-MAY-35

20,192.50

11.2500

91.8177

28-FEB-11

21-JAN-41

23,888.95

12.0000

90.8646

97.6115

ELEVEN YEAR BONDS

FXD1/2006/11YR

105.0256

TWELVE YEAR BONDS

FIFTEEN YEAR BONDS

JUNE 8, 2015
ISSUE
DATE

MATURITY
DATE

ISSUE NO.
CORPORATE BONDS
CENTUM BOND SENIOR UNSECURED FIXED RATE AND EQUITY LINKED NOTES
CTNB.BD.18.09.17/13.50
26-SEP-12
18-SEP-17
CTNB.BD.18.09.17/12.75
26-SEP-12
18-SEP-17
CONSOLIDATED BANK OF KENYA LTD MEDIUM TERM NOTE PROGRAMME
CON.BD-FXD(SN)/2012/7YR
30-JUL-12
24-JUL-19
CON.BD-FXD(SBN)/2012/7YR
30-JUL-12
22-JUL-19
CON.BD-FR(SN)/2012/7YR
30-JUL-12
22-JUL-19
SHELTER AFRIQUE MEDIUM TERM NOTES
FXD 2/2012/3YR
17-DEC-12
14-DEC-15
FXD 1/13/05YR
30-SEP-13
24-SEP-18
FR 1/13/05YR
30-SEP-13
24-SEP-18
BARCLAYS BANK MEDIUM TERM FLOATING RATE NOTES
FXD (MTN)/2008/7YR
14-JUL-08
14-JUL-15
FR (MTN)/2008/7YR
14-JUL-08
14-JUL-15
MRM
FR (MRM) 2008/8YR
27-OCT-08
17-OCT-16
FXD (MRM) 2008/8YR
27-OCT-08
17-OCT-16
CFC STANBIC BANK SENIOR & SUBORDINATED BOND ISSUE
FR (CFC STANBIC) 2009/7YR
7-JUL-09
7-JUL-16
FXD (CFC STANBIC) 2009/7YR
7-JUL-09
7-JUL-16
KENGEN PUBLIC INFRASTRUCTURE BOND OFFER 2019
FXIB 1/2009/10YR
2-NOV-09
31-OCT-19
SAFARICOM LTD DOMESTIC MEDIUM TERM NOTE
FR2 (SAFARICOM LTD) 2009/5YR
20-DEC-10
20-DEC-15
FXD2 (SAFARICOM LTD) 2009/5YR
20-DEC-10
20-DEC-15
HOUSING FINANCE MEDIUM TERM NOTE
FXD (HFCK) 02/2012/7YR 2ND TRANCHE
22-OCT-12
14-OCT-19
FR (HFCK) 2010/7YR
26-OCT-10
2-OCT-17
FXD (HFCK) 2010/7YR
26-OCT-10
2-OCT-17
I&M MEDIUM TERM NOTE
FXD I&M-01/13/5.25
13-DEC-13
8-MAR-19
FRN I&M-01/13/5.25
13-DEC-13
8-MAR-19
BRITAM MEDIUM TERM NOTE
BRTB.BD.22/07/19-0037-13
22-JUL-14
15-JUL-19
UAP HOLDINGS MEDIUM TERM NOTE
UAP.BD.22.07.2019
28-JUL-14
22-JUL-19
NIC MEDIUM TERM NOTE
NIC.BD.09/09/19-0039-12.5
8-SEP-14
9-SEP-19
CIC INSURANCE GROUP LTDMEDIUM TERM NOTE
CIC.BD.22.07.2019
8-OCT-14
2-OCT-19
CFC STANBIC MULTICURRENCY MEDIUM TERM NOTE
CFCB.BD.08/12/21-0042-12.95
15-DEC-14
8-DEC-21
CBA FIXED MEDIUM TERM NOTE
CBAB.BD.14/12/20-0041-12.75
22-DEC-14
14-DEC-20
EABL FIXED MEDIUM TERM NOTE
EABB.BD.19/03/18-0043-12.25
23-MAR-15
19-MAR-18

BONDS LISTED AT THE NAIROBI SECURITIES EXCHANGE

ISSUED VALUE
COUPON PREVIOUS
TOTAL
IN MILLIONS
(%)
PRICE
VALUE TRADED
(%)
(KSHS)
2,917.10
1,250.80

13.5000
12.7500

105.2550
99.9620

1,480.60
196.50
1.00

13.2500
13.6000

99.1677
100.0000

500.00
4,239.70
760.30

12.7500
12.7500

100.7057
100.0000

1,260.40
739.60

11.5000
85.5534

99.4819

621.50
1,378.50

100.0000
13.0000

97.91
2,402.09

100.0000
12.5000

100.0000

12.5000

101.8271

15,625
200.00
4,287.00

93.8370
8.0000

TWENTY YEAR BOND

100.0000

TWENTY FIVE YEAR BOND

103.0000

FXD1/2010/25YR

100.0000

THIRTY YEAR BOND

2,969.10
1,166.50
5,864.40

13.0000

3,429.00
226.00

12.8000

6,000.00

13.0000

99.9562

2,000.00

13.0000

99.9807

IFB 1/2010/8YR

5,514.50

12.5000

97.8453

IFB 2/2010/9YR

5,000.00

13.0000

100.0000

IFB 1/2011/12YR

5,080.00

12.9500

100.1003

IFB 1/2013/12YR

8.5000

79.8372

SDB 1/2011/30YR

94.6653

INFRASTRUCTURE BONDS

100.0000

7,000.00

12.7500

99.9654

9,047.35

12.2500

100.2003

8,300,000

IFB 1/2009/12YR

23-FEB-09

8-FEB-21

19,726.85

12.5000

105.1593

IFB 2/2009/12YR

7-DEC-09

22-NOV-21

18,897.65

12.0000

102.4081

1-MAR-10

19-FEB-18

15,908.05

9.7500

98.2874

31-AUG-10

19-SEP-19

32,871.55

6.0000

83.9920

3-OCT-11

18-SEP-23

43,447.35

12.0000

30-SEP-13

15-SEP-25

38,841.68

11.0000

IFB 1/2014/12YR

27-OCT-14

12-OCT-26

35,060.55

11.0000

IFB 1/2015/12YR

30-MAR-15

15-MAR-27

25,695.35

11.0000

100.4505
99.4658
11.3300

101.2526
97.5937

50,000,000

26

BUSINESS DAILY | Tuesday June 9, 2015

MARKET DATA
Global Markets & Currencies
Global Indexes

Currencies

FTSE 100

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 $

BUY
96.86
147.94
107.79
7.80
32.05
22.31
7.06
15.86
26.37
77.53
103.70
77.80
11.68
12.47
14.48
1.51
12.50
71.21
25.83
15.61
73.97

SELL
97.02
148.27
107.99
7.83
32.21
22.46
7.19
16.40
26.42
77.70
103.94
77.94
11.71
12.49
14.51
1.52
12.52
71.38
25.87
15.64
74.14

MEAN
96.94
148.11
107.89
7.81
32.13
22.39
7.12
16.13
26.39
77.62
103.82
77.87
11.69
12.48
14.50
1.52
12.51
71.29
25.85
15.62
74.05

US Dollar
BACKGROUND
EURO
JAPANESE YEN
BRITISH POUND
SWISS FRANC
CANADIAN DOLLAR
AUSTRALIAN DOLLAR
SWEDISH KRONA
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
MOZAMBIQUE METICAL
NIGERIAN NAIRA
RWANDA FRANC
SC RUPEE
SUDANESE DINAR
SUDAN POUND
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
ZIMBABWE DOLLAR

BID
1.11
125.29
1.52
0.94
1.24
0.76
8.40
6.21
7.94
1.71
6.70
56.22
2.78
133.00
64.11
3.73
24.59
281.55
21.10
3.87
126.35
1.76
59.99
0.40
11.70
2.26
33.81
1.53
6.78
185.95
2.85
0.51
18.18
55.19
3.41
4.00
21.55
108.07
475.40
3.67
116.31
1,545.30
0.10
913.00
97.46
177.00
98.13
7.63
20.40
4.15
42.60
15.00
7,298.83
97.40
436.45
84.00
12.54
1.37
9.73
3,180.88
312.00
420.00
37.06
198.95
685.00
12.81
200.02
2,025.50
1.53
4,225.00
21,325.00
703.00
12.54
1.95
2,169.00
3,108.00
588.62
588.62
35.00
12.56
378.00

ASK
1.11
125.30
1.52
0.94
1.24
0.76
8.40
6.21
7.94
1.72
6.70
56.32
2.78
133.29
64.13
3.73
24.64
281.85
21.15
3.87
126.60
1.76
60.19
0.40
11.71
2.29
33.83
1.53
6.78
185.96
2.85
0.51
18.28
55.51
3.42
4.01
21.60
108.49
478.40
3.67
117.47
1,565.30
0.10
943.00
98.96
178.00
98.48
7.63
20.80
4.20
43.60
15.50
7,498.83
97.50
437.45
85.00
12.58
1.37
9.74
3,258.00
325.00
450.00
38.44
199.45
696.00
13.45
201.02
2,035.60
1.54
4,425.00
22,651.00
710.00
12.59
1.95
2,179.00
3,118.00
593.62
593.62
35.20
12.56
381.00

52 WEEK
INDEX (REGION/COUNTRY)

YTD

DAILY
CLOSE

CHG

HIGH

LOW

% CHG % CHG

3-YR
% CHG % CHG

GLOBAL
THE GLOBAL DOW (WORLD)

2644.46

2378.15

-1.6

2.2

2,556.18

-27.92

-1.08

14.2

THE GLOBAL DOW EURO (WORLD)

2305.98

1752.1

20.8

11.3

2,166.52

9.83

0.46

18.7

DJ GLOBAL INDEX (WORLD)

341.62

301.71

3.4

331.72

-2.64

-0.79

14

DJ GLOBAL EX U.S. (WORLD)

251.6

217.05

-4.9

4.5

235.35

-3.58

-1.5

10.4

DJ ASIA-PACIFIC TSM (ASIA-PACIFIC)

1619.39

1384.31

4.1

7.9

1,538.40

-11.86

-0.76

10.9

ALL ORDINARIES (AUSTRALIA)

5954.8

5131

1.2

2.2

5,506.50

-4.8

-0.09

10.4

S & P/ASX 200 (AUSTRALIA)

5982.7

5152.3

0.6

1.6

5,498.50

-5.8

-0.11

10.8

DOW JONES CHINA 88 (CHINA)

398.94

173.42

126.7

33

393.93

2.43

0.62

22.9

SHANGHAI COMPOSITE (CHINA)

5023.1

2023.73

147.4

55.3

5,023.10

75.99

1.54

29.5

HANG SENG (HONG KONG)

28442.75

22585.84

18.8

15.5

27,260.16

-291.73

-1.06

14.3

S & P BSE SENSEX (INDIA)

29681.77

25006.98

5.4

-2.7

26,768.49

-44.93

-0.17

18.7

JAKARTA COMPOSITE (INDONESIA)

5523.29

4838.98

3.3

-2.4

5,100.57

4.75

0.09

11.1

NIKKEI 300 (JAPAN)

340.56

238.07

34.7

18.8

337.91

-1.51

-0.44

33.1
34.6

ASIA PACIFIC

NIKKEI STOCK AVG (JAPAN)

20569.87

14532.51

35.7

17.2

20,460.90

-27.29

-0.13

TOPIX INDEX (JAPAN)

1678.56

1177.22

35

18.4

1,667.06

-6.83

-0.41

33

KUALA LUMPUR COMPOSITE (MALAYSIA)

1892.65

1673.94

-6.3

-0.9

1,745.33

3.85

0.22

3.8

NZSX-50 (NEW ZEALAND)

5911.4

5049.63

13.2

5.4

5,867.90

2.46

0.04

19.7

KSE 100 (PAKISTAN)

34826.51

27774.43

15.3

5.9

34,012.49

-73.25

-0.21

35.4

PSEI (PHILIPPINES)

8127.48

6699.39

11.3

15.2

STRAITS TIMES (SINGAPORE)

3539.95

3154.21

KOSPI (SOUTH KOREA)

2173.41

1882.45

3.6

COLOMBO STOCK EXCHANGE (SRI LANKA)

7605.79

6279.14

13.4

WEIGHTED (TAIWAN)

9973.12

8512.88

2.3

SET (THAILAND)

1615.89

1451.36

4.1

7,526.70

-26.95

-0.36

-0.9

3,333.67

-11.33

-0.34

7.1

2,068.10

-4.76

-0.23

4.7

-2.4

7,122.73

1.82

0.03

14.5

0.4

9,340.13

-8.5

-0.09

10.1

3.4

0.6

1,507.37

16.47

1.1

11.1
18.4

EUROPE
STOXX EUROPE 600 (EUROPE)

414.06

310.03

12

13.6

389.00

-3.65

-0.93

STOXX EUROPE 50 (EUROPE)

3591.47

2781.33

10.1

11.5

3,349.46

-25.08

-0.74

14.7

EURO STOXX 50 (EURO ZONE)

3828.78

2874.65

6.5

11.6

3,510.01

-46.37

-1.3

18.9

EURO STOXX (EURO ZONE)

392.35

288.41

8.4

13.5

362.75

-4.95

-1.35

20

ATX (AUSTRIA)

2681.44

2032.13

-0.9

17.8

2,544.67

-67.68

-2.59

10.9

BEL-20 (BELGIUM)

3905.71

2887.73

15

11

3,646.69

-45.38

-1.23

21.1

PX 50 (CZECH REPUBLIC)

1058.4

901.3

-3

6.1

1,004.90

-13.87

-1.36

4.7

OMX COPENHAGEN (DENMARK)

894.69

611.68

31.6

29.4

873.56

...

CLOSED

31.9

OMX HELSINKI (FINLAND)

9374.42

7010.83

9.2

9.3

8,479.16

-112.75

-1.31

20.6

CAC 40 (FRANCE)

5268.91

3918.62

7.4

15.2

4,920.74

-66.39

-1.33

18.1

DAX (GERMANY)

12374.73

8571.95

12.1

14.2

11,197.15

-143.45

-1.26

23.3

BUX (HUNGARY)

22850.53

15686.69

17.1

34.2

22,326.95

23.18

0.1

10.8

FTSE MIB (ITALY)

24030.54

18078.97

2.5

20.2

22,847.34

-489.16

-2.1

20.8

AEX (NETHERLANDS)

509.24

376.27

16

12.9

479.38

-5.91

-1.22

18.9

ALL-SHARES (NORWAY)

711.22

575.27

0.9

12.6

697.58

0.93

0.13

17.8

WIG (POLAND)

57379.45

49593.68

5.6

54,278.69

-471.05

-0.86

14

PSI 20 (PORTUGAL)

7445.36

4606.25

-21

21

5,804.53

-68.45

-1.17

8.9

RTS INDEX (RUSSIA)

1421.07

629.15

-32.1

16.7

922.67

0.04

0.004

-9.5

IBEX 35 (SPAIN)

11866.4

9669.7

UNCH.

7.6

11,062.00

-84.1

-0.75

20.8

SX ALL SHARE (SWEDEN)

564.9

405.51

16.2

10.9

525.73

-6.36

-1.2

20.7

SWISS MARKET (SWITZERLAND)

9471.46

7899.59

5.1

1.4

9,105.02

-128.63

-1.39

16.8

BIST 100 (TURKEY)

91412.94

72943.5

1.9

-4.4

81,943.42

-555.6

-0.67

13.7

FTSE 100 (U.K.)

7104

6182.7

-0.8

3.6

6,804.60

-54.64

-0.8

FTSE 250 (U.K.)

18263.46

14426.74

10.5

11.5

17,931.29

-159.13

-0.88

20.1

AMERICAS
DJ AMERICAS (AMERICAS)

524.44

464.33

4.8

1.4

514.46

-0.62

-0.12

15.7

MERVAL (ARGENTINA)

12593.07

7235.11

41.7

30.7

11,215.76

-30.17

-0.27

72.1
0.3

SAO PAULO BOVESPA (BRAZIL)

61895.98

46907.68

-0.3

5.9

52,973.38

-549.53

-1.03

S & P/TSX COMP (CANADA)

15657.63

13705.14

0.8

2.2

14,957.16

-62.23

-0.41

9.1

SANTIAGO IPSA (CHILE)

3377.92

3060.25

-1.7

3,197.92

11.45

0.36

-8.7

IPC ALL-SHARE (MEXICO)

46357.24

40225.08

4.2

3.3

44,561.94

0.83

0.002

6.3

CARACAS GENERAL (VENEZUELA)

12615.85

2103.4

477.5

226.9

12,615.85

244.24

1.97

273.2

Global Indices
NAME

LOCATION

LAST

NET.CHNGPCT.CHNG

OPEN

HIGH

LOW

CLOSE

DJ INDU AVERAGE

NEW YORK

17,849.46

-56.12

-0.31%

17,905.38

17,940.78

17,822.90

17,905.58

FTSE EUROTOP 100

LONDON

3,077.02

-7.74

-0.25%

3,088.31

3,092.18

3,067.73

3,084.76

XETRA DAX PF/D

FRANKFURT

11,150.18

-46.97

-0.42%

11,131.86

11,224.56

11,107.14

11,197.15

CAC 40 INDEX/D

PARIS

4,889.89

-30.85

-0.63%

4,906.17

4,917.52

4,875.08

4,920.74

FTSE MIB/D

MILAN

22,831.36

-15.98

-0.07%

22,858.07

22,959.41

SMI PR/D

SWITZERLAND 9,080.74

-24.28

-0.27%

9,089.31

9,108.42

9,058.92

9,105.02

HANG SENG INDE/D

HONG KONG

56.12

0.21%

27,147.24

27,428.59

27,060.24

27,260.16

NIKKEI 225 INDEX

TOKYO

20,457.19

-3.71

-0.02%

20,537.85

20,544.94

20,359.06 20,460.90

ALL ORDINARIES

AUSTRALIA

5,506.50

-4.81

-0.09%

5,511.30

5,535.40

5,479.70

5,511.31

STRAITS TIMES/D

SINGAPORE

4,240.99

-17.04

-0.40%

4,248.70

4,258.44

4,238.37

4,258.03

SSE COMPOSITE/D

SHANGHAI

5,131.88

108.78

2.17%

5,045.69

5,146.95

4,997.48

5,023.10

S&P SENSEX/D

MUMBAI

26,634.76

-133.73

-0.50%

26,814.31

26,827.06

27,316.28

22,721.04 22,847.34

26,503.41 26,768.49

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
BG GROUP/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
EVRAZ PLC/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
IMPERIAL TOBAC/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
MEGGITT PLC/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
REED ELSEVIER/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
KENYA AIRWAYS/D

LAST
1001.00
2941.00
1460.00
421.80
1524.00
727.60
1126.00
314.50
512.50
4363.50
496.80
263.25
3407.50
1102.15
823.00
1313.00
1856.00
439.60
1662.92
443.50
3197.00
263.96
1118.00
1217.00
2807.00
1809.00
1878.50
174.80
157.60
1215.00
709.99
286.80
361.20
274.25
1393.00
640.50
1234.00
620.30
548.50
525.40
2686.00
1214.00
3178.80
2532.00
263.70
3266.00
249.70
379.31
1255.00
264.70
86.63
494.73
559.69
171.50
861.20
7281.80
209.60
898.50
528.50
1587.50
1309.00
5710.00
353.30
1894.35
1065.00
1910.50
551.51
2816.50
965.84
4571.00
437.20
3372.00
245.24
3263.00
2464.00
547.00
5385.00
470.40
1180.00
1121.00
132.10
1591.00
1030.00
2128.00
555.14
373.40
202.55
2812.00
959.13
545.37
245.24
1925.00
4014.00
1485.00
5005.90
7.00

CLOSE
1015.50
2935.00
1466.00
421.40
1529.00
737.00
1128.00
315.90
515.00
4367.50
498.30
265.45
3440.00
1106.00
821.50
1327.00
1861.00
443.35
1662.00
439.40
3203.00
265.60
1115.00
1224.00
2829.00
1809.00
1760.50
176.20
160.80
1207.00
719.00
287.60
366.90
277.40
1398.50
640.00
1238.00
618.90
550.00
530.00
2689.00
1235.00
3185.00
2545.00
264.90
3309.00
250.00
377.20
1249.00
264.00
87.09
495.50
560.00
173.60
857.00
7270.00
210.10
894.50
533.00
1588.00
1296.00
5697.00
357.00
1902.50
1059.00
1919.50
553.00
2852.50
971.50
4575.00
435.00
3365.50
247.20
3262.00
2476.00
547.50
5455.00
472.20
1180.00
1123.00
133.40
1593.00
1035.00
2130.00
555.50
379.60
205.80
2819.00
958.00
553.00
242.05
1935.00
4004.00
1486.00
4977.00
7.00

NET.CHNG
-14.50
6.00
-6.00
0.40
-5.00
-9.50
-2.00
-1.40
-2.50
-4.00
-1.50
-2.20
-32.50
-3.50
1.50
-14.00
-5.00
-3.75
-4.00
4.10
-6.00
-1.60
3.00
-7.00
-22.00
0.00
118.00
-1.40
-3.20
8.00
-9.50
-0.80
-5.70
-3.15
-5.50
0.50
-4.00
1.40
-1.50
-5.00
-3.00
-21.00
-5.00
-13.00
-1.20
-43.00
-0.30
2.20
6.00
0.70
-0.46
-0.60
0.00
-2.10
4.20
10.00
-0.50
4.00
-4.50
-0.50
13.00
13.00
-3.70
-8.50
6.00
-9.00
-1.00
-36.00
-6.00
-4.00
2.20
6.50
-2.00
1.00
-12.00
-0.50
-70.00
-1.80
0.00
-2.00
-1.30
-2.00
-5.00
-2.00
-0.50
-6.20
-3.25
-7.00
1.00
-7.50
3.15
-10.00
10.00
-1.00
28.00
0.00

PCT.CHNG
-1.43%
0.20%
-0.41%
0.09%
-0.33%
-1.29%
-0.18%
-0.44%
-0.49%
-0.09%
-0.30%
-0.83%
-0.94%
-0.32%
0.18%
-1.06%
-0.27%
-0.85%
-0.24%
0.93%
-0.19%
-0.60%
0.27%
-0.57%
-0.78%
0.00%
6.70%
-0.79%
-1.99%
0.66%
-1.32%
-0.28%
-1.55%
-1.14%
-0.39%
0.08%
-0.32%
0.23%
-0.27%
-0.94%
-0.11%
-1.70%
-0.16%
-0.51%
-0.45%
-1.30%
-0.12%
0.58%
0.48%
0.27%
-0.53%
-0.12%
0.00%
-1.21%
0.49%
0.14%
-0.24%
0.45%
-0.84%
-0.03%
1.00%
0.23%
-1.04%
-0.45%
0.57%
-0.47%
-0.18%
-1.26%
-0.62%
-0.09%
0.51%
0.19%
-0.81%
0.03%
-0.48%
-0.09%
-1.28%
-0.38%
0.00%
-0.18%
-0.97%
-0.13%
-0.48%
-0.09%
-0.09%
-1.63%
-1.58%
-0.25%
0.10%
-1.36%
1.30%
-0.52%
0.25%
-0.07%
0.56%
0.00%

Tuesday June 9, 2015 | BUSINESS DAILY

LI E

MANAGEMENT

27

Management

Spots
Wane sought
It mattes how you pass Sh672m fom
that leadeship baton
Egypt
Page 28

Page 31

PERSONAL FINANCE

Questions to ask when

you ae tempted to
hie a caee switche
KEY Bringing in a switcher into the team is a risk,

but performers can prove theyre worth the risk

efore she was a chef, Julia Child was

2. Does the candidate see the elephant
a spy for the Oce of Strategic Servin the room?
ices (the World War II intelligence
Its a red ag when someone applies
agency that preceded the CIA). Singer
for a job theyve never had before or wants
to be considered for a role in which they
Elvis Costello started out as a computer
programmer operating an IBM 360 in an
have no experience. If you come across an
oce next to a lipstick factory. Whoopi
unlikely resume as a hiring manager, your
rst consideration should be whether the
Goldberg, a trained beautician, worked
candidate has pointed out the elephant
make-up magic in a mortuary.
Okay, those are romanticised examples.
in the room.
But today there are too many degrees and
It can be as simple as an objective or
not enough jobs in certain industries. The
summary statement in their resume or covpassion a person has entering a profeser letter that says, Experienced spy with a
passion for French cooking hopes to transision often turns into practicality by the
time they hit the job market. Many people
tion into a new career in the kitchen.
graduate with a psychology degree and
then start their career in human resources.
3. Do they understand the challenge
Graphic designers may morph into frontof the career switch?
end developers down the line. Account
If theyve established credibility by addressing the obvious, your next self-awareexecutives become account managers
ness assessment is to gauge whether they
and vice versa.
understand the challenges theyre up
More and more youre running into
against in entering a new
resumes that, at rst
career, like gaining new
glance, look like the
domain expertise, workcandidate is trying to
Keep an open
ing with dierent funcmake a huge career
mind and an
tional teams or mastering
swing with the risk
new skills.
falling squarely in
honest gut
The
ve-foot-seven,
your lap. There is risk,
o you isk
130-pound freshman trybut theres also opportunity. There are seven
ing out for varsity basketmissing out
questions to ask, three
ball better say more than
on exemplay
of yourself and four of
practice hard when asked
the candidate, to deterwhat he thinks he needs to
employees
mine if serendipity has
do to make the team. Hed
brought you your next
better show you he has a
great team member.
realistic, strategic plan to
compete against the more
1. Youre clued into their career switch,
likely players.
but are they?
A resume is only going to tell you so
Not every career sticks, especially when
much, so to nd out if theyre aware of these
youre young and trying to balance paschallenges -- and furthermore, if they have
sion and priorities. However, when youre
a plan of attack -- get in front of the person
reviewing Julia Childs application for a
and ask them directly.
role as a sous chef and all you see on her
Here are four questions that can help
resume is espionage investigation and
you evaluate their qualications and the
wartime spying, youre going to need her
thought theyve put in to the challenge of
to come to the table with more than just
switching careers:
an eagerness to cook.
As the hiring manager, you need to start
1. What is driving you to make this caby gauging how clued in she is regarding
reer change?
her 180-degree career switch.
This question helps you understand

Performing
career
switching
candidates
recognise
their limits
and strategise
on how to
overcome
them. FOTOSEARCH

their impetus. They should be able to demonstrate that theyre passionate about the change
theyre making.
2. What skills from your previous position will help you be successful in this position?
This helps you understand if theyre aware of
how their skills cross over. They should be able to
provide examples of how this is the case.
3. What skills do you think you need for this
position that you didnt need or use in your
previous role?
This helps you see if they understand what
they might be lacking. They should be able to
articulate what theyre missing and how they
plan to ll the gap in experience.
4. How can you make a greater impact in
this role?
This helps you see if theyve given thought
to the more philosophical aspects of their career switch. If the candidate is passionate and

qualied, like Julia Child applying for her rst

cooking job, they should be able to explain why
ultimately theyre much better suited in a kitchen
than a cubicle.
If the candidate has the right answers, youll
both become truly aware of the challenges ahead
if the two of you agree to head down this increasingly common path.
True performers can prove theyre worth
the risk.
Performers dont often t into tidy boxes. The
last thing you want to do as youre building teams
and growing your company is overlook a top
performer simply because they havent had the
chance to prove themselves in a new role.
Keep an open mind and an honest gut or you
risk missing out on exemplary employees who
know both why theyre making the switch and
how they can do it successfully.
After all, the skills may be there, and so may
the passion, drive, and qualications; you just
need them to show you.
-ENTREPRENEUR

28

BUSINESS DAILY | Tuesday June 9, 2015

Life: Management
PLAN There should be a clear nish line, a good two-way discussion about what needs to be done

It mattes how you

pass that baton duing
leadeship tansition
created three tiers of sponsorship options:
six partnerships, eight sponsorships and
STAYING AHEAD
then national supporters, a strategy that
was to prove wildly successful.
CANUTE WASWA
In the four years leading up to the 2014
World Cup, Fifa earned $1.63bn (Sh157
billion) from its marketing deals, a near
60 per cent rise from the previous fourhe evil that men do lives after them; year cycle.
the good is oft interred with their
And unfortunately, there have been ludicrous excesses along the way. Apparently
bones.
The above is a quotation from Act 3, Corruption crept into the system and now
scene 2 of Julius Caesar by William Shake- Sepp Blatter, the Fifa president, has had to
speare. As I have watched the drama unfold resign amid the allegations.
at Fifa, I have had deep reections on the
Hence my reections on the pertinent
same and the lessons we can learn from the question of legacy.
same. But I am going ahead of myself.
In his book, Seven Habits of Highly Successful People, Stephen Covey
For the record, Fifa is a
advises us to begin with the
democratic organisation.
Every member nation has a
You ability as a end in mind.
If you want to be a respectsay in its functioning. The
leade will not
organisation has been recordbe measued by ed and remembered leader,
ing phenomenal prots and
the buildings you start thinking about your
much of that has been passed
build...You will legacy now. People need to
on to the member nations.
be judged by how know who you are, what you
The take-o of FIFAs well the people stand for, and what you will
nancial success began in 1974
you invested in and wont negotiate.
with a man called Joo HaveIf youve seen the relay
caied on afte
lange. He was from Brazil. Mr
race, youre familiar with
you ae gone
Havelange transformed the
this concept. Four runners
World Cup from a largely European aair work together to win a race by running
into a global contest, funding the expansion one segment each. Each runner carries a
with the help of Horst Dassler, the head of white plastic baton as they run, and must
Adidas, which was to become Fifas most pass it o to the next in line before he or
important partner.
she can take o.
The trajectory has been so good that afAnd of course I represented my house in
ter the 2006 World Cup in Germany, Fifa the relay race in high school. Only then did I

The process
of passing the
baton is crucial to
determining the
legacy of a business
leader. FILE

discover that passing the baton is easier said

than done. I remember running full speed
to the end of my 400 metres, and there was
a specic zone on the track where I was allowed to make the hando.
The next runner started increasing speed
as I approached, then turned forward and
oered his hand backwards to receive the
baton.
My job was to slap it into his hand and hold
on until I felt a rm tug letting me know that
he really had it.
But I let go too soon, and the baton
dropped to the track. It bounced around as
he tried to pick it up, and the setback ruined
our chances of winning.
My gut feeling is that that is what Sepp
Blatter has done to Fifa. But it gets worse, succession planning in your company works the

same way. When you give a task to someone,

it makes a big dierence in how you hand
it o. There should be a clear nish line, a
good two-way discussion about what needs
to be done and a rm tug when the delegated
says I got it.
The twenty-rst law of John Maxwells 21
Irrefutable Laws of Leadership is the law of
legacy: A leaders lasting value is measured
by succession
Your ability as a leader will not be measured by the buildings you build, or institutions you established. You will be judged by
how well the people you invested in carried
on after you are gone.
Please nish well.
Mr Waswa is a management and HR specialist and managing director of Outdoors Africa.
E-mail: waswa@outdoorsafrica.co.ke

Fou simple steps to eignite you passion and ean income

Have you ever heard the saying Do
what you love and youll never work
a day in your life? Its a secret that
people who are passionate about their
work have come to understand.
Many struggle to know what it
is they are truly passionate about,
let alone how to make an income
doing it.
Unfortunately, passion isnt something we traditionally see in the everyday oce workplace. Individuality is discouraged in most corporate
environments. People who are especially eccentric tend to wither in that
world and eventually fade out.
But what if eccentric is just another
way to say being yourself? Because
we all have little eccentricities, somewhere, and we exude the most fun and
passion when we let our freak ag y.

In eccentricity often lies innovation,

vision and creativity -- all things that
are incredibly valuable.
At some point in elementary
school it becomes no longer cool
to show too much excitement. The
kids who maintain their exuberance
beyond the age of eight or so tend to
be ostracised and shunned. At such
an early age we internalise that our
passion needs to be watered down so
we can t in.
In todays ever changing job market, it is actually imperative that you
stand out -- not t in. This is why
your passion, if it has died out, must
be reignited. So that you can be outstanding.
Here is where the work begins.
First lets address how you can relocate your passion if you have lost it.

First, remember what you used to

love. As we grow up we tend to forget
what we lost ourselves as kids. What
were the things that lit you up and you
could spend hours immersed in? For
me, one of those things was basketball. Maybe you loved climbing trees
or making up songs or playing video
games with your friends. Maybe it
was art or music or writing stories in
your bedroom.
Try to remember what it was that
made you happiest. If childhood
doesnt oer any answers, try digging into the most recent memory of
your happiest moments. Name that
thing that you love.
Secondly, do what you love consistently. This is important, especially
if it has been a long time. You owe it
to yourself and to the world to bring

your passion back into your life. Start

with one day a week. Maybe a dance
class, or get back to the gym for a pickup game. See how it feels. See how
you shift. Take that passion with you
into the next day and see how you can
bring it into the world by sharing the
good with others.
Maybe you smile more. Maybe
your work is more creative.
Thirdly, dont wait for it, create it.
Passion comes from within. Thats
why it can be so elusive, because we
start waiting for the world to bring
passion to us rather than cultivating
it ourselves.
We are passive, waiting to be entertained. We seem to have forgotten that
we are the ones who are in charge of
hosting the parties and creating experiences in our lives. Unless you bring

something to the table, who would

want to invite you to theirs?
So by doing what you are passionate about consistently, you will
remember how to exercise your passion muscles.
Lastly, get outside the comfort
zone. Maybe you dont have the ability to do the things you once loved due
to injury or other limitations. This
doesnt mean you give up on passion,
it means you get to start exploring.
You really never know what activities
or pursuits may captivate you once
you engage in them.
Ultimately, it is up to you to generate the passion that will inspire others
and the world. When you master that,
you will see your self worth increase
and therefore your net worth.
-ENTREPRENEUR

Tuesday June 9, 2015 | BUSINESS DAILY

29

Life: Management

Wokes of good chaacte best bet to win wa against gaft

INTEGRITY No technological solution is

foolproof to thwart corruption attempts

FAMILY BUSINESS
PETER MUTUA
Enter not into the path of the wicked, and go not in the way of evil men.
Avoid it, do not go in it; turn from it and pass on. For they cannot sleep
unless they have caused trouble or vexation; their sleep is taken away
unless they have caused someone to fall.
Proverbs 4:14-16

ontrary to popular opinion, the Goliath that is corruption in Kenya did not
rear its head on March 28 the date
when President Uhuru Kenyatta suspended
ocers in his government to pave way for
investigations into allegations of corruption.
It wasnt even on January 18 when police
violently dispersed primary school children
protesting the grabbing of their playground
by unscrupulous individuals.
Goliath made his clearest call yet on Friday June 27, 2014 when a local daily reported
that corruption and bribery costs our local
economy Sh 3.4trillion every year. This claim
by the Kenya Association of Manufacturers
based on a report released in conjunction
with KPMG and the British High Commission went uncontested.
Even by the leaders of family business
whom it ought to have concerned the most
seeing that they, as the main drivers of the
local economy, are the primary perpetrators
and victims of corruption.
Family businesses pay dearly for corruption. In the rst week of June, Tuskys
Supermarket indicted 91 sta members on
suspicion of outright theft at one of their
city branches in a scam that seems to have
brought together sta and managers. Like
the Haco scandal of May, it is certain that

Family businesses should hire good ethical managers to oversee their operations and stop
corruption instead of depending on technological solutions. FILE

this branch reported articial good results

until they were caught out.
Tuskys is not alone. Family-owned nancial, insurance and retail institutions
continue to suer quietly even as they try
to deploy technology to sni out corruption
in its early stages.

Ruthless enemy
While this may be partially eective, the surest remedy for corruption even for the family
business is good character; of the leader and
of the key managers. Anything short of this is
a futile attempt to ght a well-armed, ruthless enemy who takes no prisoners.
Leaders of family business should be
comforted to know that there are individu-

als and institutions among their midst who

have decided to take on the monster of corruption and unethical leadership.
While they may not strictly be family
businesses, institutions such as Stoic Car
Centre, Lubesol, Fusion Capital, ECLOF,
Liberty Pensions, Compassion International, ESRI East Africa, MEFA Creations,
Gertrudes Childrens Hospital and TERMS
Kenya together with their leaders have taken
a stand against corruption by embracing
ethical leadership as a way of life at every
level.
As winners of the ELNET Mark of Ethics
Awards, they are the Davids that have stood
up against Goliath within their organisations and sectors.

How a leade can inspie team

to embace oganisational goals
Every leader needs other people to fulll a vision, achieve organisational objectives or deliver results.
Simply stated, no leader can do it
all by themselves. The success of the
leader is dened by the decisions and
actions of others who are empowered
to accomplish their respective responsibilities.
There are three critical keys that
every business owner, executive or
organisational director needs to follow to make that happen.
1. Clarity of goals
I used to work at a sleepy, regional
telephone company that prided it-

self on customer service but lacked a

strong commitment to innovation. In
the mid-1990s the company got a new
CEO who changed all that.
Even though the Internet was in its
infancy, his goal was to pull that company into the 21st century by transforming the enterprise from dial tone
to data. It was clear that he wanted
to make the necessary investment in
infrastructure, technology and training to ensure the company was ahead
of the needs of our customers. After
several years of subsequent acquisitions and strategic divestitures, the
company became a next-generation
telecommunications organisation

with a national ber-optic network,

leading edge data centres and a demonstrated commitment to ongoing
employee training.
The CEOs transformational goal
of moving from dial tone to data
was a clear, understandable rallying point that was necessary for the
organisations survival. Without that
clearly stated goal, the organisational
transformation implemented by the
employees would have stalled.
2. Consistent communication
This same CEO believed in over
communication across the enterprise.
I was responsible for internal and ex-

ternal communications for the company, and he constantly challenged

me to nd new ways to communicate
our collective objectives and progress
company wide.
My team implemented a robust
communications schedule for the
CEO and his direct reports to travel
across the country setting the vision
and reinforcing it amongst the various
employees and union leaders face-toface. We used weekly print newsletters
so eld technicians, who didnt have
laptops at the time, were informed
when they picked up their daily repair and installation assignments at
the remote locations.
We also launched an Intranet as
well as weekly conference calls, voicemail recordings and videoconferencing with the executive team, new communication tools had not been widely
used across the corporation back then.
This relentless commitment to com-

They may not be the most visible or dramatic organisations, but leaders of family
business will do well to interact with them
and see what it means to take on graft and
win.
The leader of family business must realise that ethical leadership lies at the core of
a healthy business venture. They ought to
be concerned by the presence of corruption
and take a keen interest in the character of
the people whom they engage as managers within their organisations. Failure to
do this will cost them energy, good people
and money.
While there are technological solutions to
limit the eects of corruption through automation, it is unlikely that there will ever be a
foolproof system that can thwart the eorts
of people who are bent on evil.
Family businesses ought to invest their
time and energy in crystalising values, identifying sta that resonate with these values
and promoting the ventures noble cause.
Organisational culture is often determined by only 3-15 per cent of its total
population who are its opinion leaders.
If this segment is dominated by people of
questionable morals, the entire organisation will be dragged down to their level. This
ultimately leads to the exodus of individuals of good character and the organisations
descent to doom.
The ultimate penalty for unethical leadership is crippling nancial losses.
While there may be the dramatic results,
prots or savings at the initial stages, this
often masks murky goings on within the
venture carried out for the benet of the
unethical manager.
At the end, the evil supervisor smiles all
the way to the bank as the company picks
up the pieces of a business ruined by corruption.
Mr Mutua is a Humphrey Fellow, leadership development consultant and author
of the book The African Prince available
on Amazon Kindle. His email address is
p.m.mutua@googlemail.com

munication ensured alignment with

the organisational goals and helped
inform every individuals role toward
delivering the expected results.
3. Trust
A leader cant accomplish anything
without trust.
This was the most dicult key to
implement in our particular transformation from dial tone to data.
Thats because for years prior to the
new CEO joining the organisation,
there had been conict, mistrust and
rancor between the unions and senior executives. The animosity got so
heated during one contract negotiation cycle that, until contracts were
nalised, a few executives received
dead animals mailed to their homes
and were routinely wakened in the
middle of the night by bullhorn sirens
in their yards.
-ENTREPRENEUR

30

BUSINESS DAILY | Tuesday June 9, 2015

Life: Brand Management

TIMES CROSSWORD 24,082
1

10

11

13

12

14

15

16

17

18

19

21

22

23

20

24

25

Elephants drink water at the Sarova Salt Lick Lodge. FILE

26

Business lessons fom the jungle

MARKET TALK
BONIFACE NGAHU

few weekends ago, I joined my

friends on a trip to Taita Hills Conservancy. As a nature lover, I get inspired by being in the wild or hugging trees.
This time round my interests were to have
a game drive in the wild and to sample the
hospitality at Sarova Salt Lick Lodge, which
has been one of the items on my bucket list.
Todays Market Talk highlights some lessons
that came to mind during my tour.
At night we were woken up by the noise
of elephants as they drank water at the salt
lick. One huge elephant was drinking about
four meters from my observation point; it
was disappointing that I couldnt take a
good photo because there were instructions against using the ash so as not to
scare the animals.
What came to mind was the book titled;
Who Says an Elephant Cant Dance?: Leading a Great Enterprise Through Dramatic
Change by Louis Gerstner. The book has
great lessons on how to turn around big
corporations from destruction. Gerstner
is a former CEO of IBM where he oversaw

a turnaround of the computer giant.

When he joined the company, the authors rst task was to redirect the rms
eorts to the market place which was changing quickly and customers felt largely ignored. He achieved tremendous success
in turning the company around though
his critics say he underplayed the input of
some employees who made his initiative
successful.
Transforming the culture of a big corporation is a dicult task and it takes great
personal leadership at the top to succeed.
Following the recent article by Dr Bitange
Ndemo on Kenya Airways (KQ) apparent
lack of competitor orientation in ticket pricing, KQ bosses can pick some good lessons
from this book.
After breakfast and a game watch from
the hotel, we left for the Salt Licks sister
hotel Sarova Taita Lodge where we would
pick our lunch boxes after swimming. Both
hotels had relatively low bookings though
there was a good mix of tourists from different markets.
After swimming we picked our lunch
boxes and a map of the conservancy, and
embarked on a game drive. Our aim was to
go to Lion Hill where we hoped to nd big
cats like lions and leopards. Eventually we
didnt get to Lion Hill but we explored the
conservancy thoroughly. I remembered
the phrase that if men were not explorers,

America would not have been discovered. As

we were going back to the lodge at dusk, we
decided to check on a Lalenywa camp after
seeing its directional sign. We ended up at a
chiefs camp where the chief was not keen to
receive guests; he was almost rude. We realised we were lost as the camp was outside
the conservancy we were exploring.
Any direction we took would end up at
the chiefs camp. The mobile network was
weak and it was hard to access Google Maps.
At one point we got to a place where Vodacom was sending us messages welcoming
us to Tanzania. We returned to the chiefs
camp where one of the sta escorted us in
their vehicle to the road leading to the conservancy. We got to the lodge by midnight
for a well-deserved rest.
I kept thinking about Lewis Carolls, Alice in Wonderland, where Alice asked the
cat for direction and the cat responded that
if you dont know where you are going, any
road can get you there. Make sure you have
a good strategic plan to guide you into the
future. Also remember that in the jungles of
Africa, when the sun rises it doesnt matter
whether you are a lion or a gazelle. Youve
got to start running otherwise you will be
turned into food or sleep hungry.
Mr Ngahu is the marketing director of SBO Research. E-mail:
bngahu@sboresearch.com

TIMES 25,081

Gaduation chees land fou people in touble

A Mississippi school superintendent has pressed charges
of disturbing the peace against
several people who cheered
during a recent high school
graduation despite being asked
to hold their celebrating until
the end. Jay Foster, superintendent for the Senatobia Municipal School District, said he told
spectators at the Senatobia High
School graduation last month
not to applaud for family members until all graduates names had been called in
order to keep the ceremony dignied.

We didnt tell them they

couldnt cheer. We just asked
them to wait until the end so
everyone has an opportunity to hear their graduates
name, he said.
Four people did not comply
and were asked to leave, Foster said. The superintendent
later went to the police to
pursue charges against the
three people he has been
able to identify so far.
I want them to know there are consequences for
their behaviour, he said.

S C AMP E R I NG
C O D E
A
R
U
H O
I
H
N E R E I D S
AR S E N A L
H
T
O
O
O
O
C
P
P R I ME
A L LO TME N T
D
S
E
O
H
O
T
I N S T R UME N T A L
N M P
I
A
O
E
S
DU T C HC O UR AG E
N
D
N
E
G
C
B
D E T R I ME N T
R E I C H
A
L
A O
O
R
A N
B E ND I NG
H O E D OWN
N O
O
I
M M A
KE E N
N
O
G
A
R
D
S N AP

SUDOKU 010

27

28

Across
1 Having a large staff, like a busy
maternity ward? (6-9)
9 Pirate very briey at sea in armed
vessel (9)
10 A place in the countrys football
team (5)
11 Its serious when openers out,
having score less than a hundred (6)
12 Increase in deliveries following
settlement of dispute (4,4)
13 Wild abandon (6)
15 Deep thinker society values (8)
18 Entertainer in company, kind of
average (8)
19 Bird crossing lake is quail (6)
21 Rejected support by social group in
critical speech (8)
23 Ignoring whats right and wrong in
early exam (6)
26 Primate contributing to church
importantly (5)
27 Youth was nding fault about line
by poet (9)
28 Adjust angles rightly to bag ducks
here? (8,7)

Down
1 See what someone is saying (3-4)
2 Convey sound of bee, a buzz (5) 3
Real tune arranged with key not varied
(9)
4 Day in Rome that is cut short (4)
5 Killer skilled at evading charges (8)
6 Very shortly put into service as
labourer (5)
7 Falsely acquired title, long abandoned
(3-6)
8 Times raised amount of money for
religious scholar (7)
14 Is 70% compatible, perhaps, or
absolutely so (9)
16 Create revolutionary movement
about European fashion, for example
(4,5)
17 Fish I preserve in centre of London
(8)
18 Ancient manuscripts cut into pieces
in island (7)
20 Time off for jazz singer (7)
22 Lush climbing plant in another
location (5)
24 River ultimately French one (5)
25 Slightly wound attacker on ank (4)

SUDOKU PUZZLE

011

How to play
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

Tuesday June 9, 2015 | BUSINESS DAILY

GRAFT Minister says money was meant to secure 2010 World Cup hosting votes

Egyptian says Jack Wane sought

Sh672 million to inuence voting

Former FIFA vice president Jack Warner (left) is escorted by a parliament ofcer in Trinidad and Tobago. He is a lawmaker. AFP

he former head of Egypts football federation said on Sunday that ex-FIFA

Vice President Jack Warner asked for
$7 million (Sh672 million) from Egypt, suggesting it could help with Egypts bid to host
the 2010 World Cup.
Al-Dahshouri Harb told Reuters in a telephone interview that Warner expressed interest to him in being an adviser to Egypts
bid and had said the money could be used to
support poor football associations in Latin
American countries.
Harb quoted Warner as saying at a meeting in the United Arab Emirates: I have many
votes in Latin America and I could be your adviser in Europe. I have many friends (there).
Harb said Warner asked for $7 million, saying he would not take the money for himself
but to give to the poor clubs and federations
in Latin America. The meeting took place before 2010, said Harb, who did not elaborate.
Warner could not immediately be reached

for comment. He is among nine current and

former FIFA ocials and ve corporate executives charged by the US Department of
Justice with running a criminal enterprise
that involved more than $150 million (Sh48
billion) in alleged bribes.
Warner has denied the charges against him
and has said he never took a bribe. I have been
aorded no due process and I have not even
been questioned in this matter, Warner, who
is from Trinidad and Tobago, said in a statement last month. I reiterate that I am innocent of any charges.
Egypt famously failed to receive a single
vote when the host of the 2010 World Cup
was announced in 2004. The tournament
ultimately went to South Africa. Aley Eddine
Helal, Egypts minister of youth and sports
from 1999 to 2004, told an Egyptian TV show
on Thursday that Harb had told him about the
oer to help Egypt after their meeting.
He came back and informed me that

(Warner) had said: If you want to win, you

must pay $6 milllion- $7 million. One vote
costs $1 million, said Helal.
He said Egyptian authorities had rejected
the oer. Reuters could not immediately reach
Helal for further comment.
Meanwhile, lawmakers across Paraguays
political divide are urging senators to approve
stripping the headquarters of South American football of its legal immunity, a status
that spotlights how soccers global governing
body FIFA has often been able to skirt legally
around national laws.
A draft Bill to remove the immunity was put
to Congress in late May, days after US authorities indicted 14 past and present senior soccer
ocials and sports media executives on a series of corruption charges, including bribery
and money laundering. FIFA President Sepp
Blatter announced his resignation last week
as the investigation of FIFA and its aliates
continued to widen. -REUTERS

Feai pesident
calls fo etun of
efuelling in F1

errari president Sergio Marchionne

says he wants to bring refuelling back
to Formula 1 from 2017, despite opposition from teams.
Attending the Canadian Grand Prix, Marchionne admitted he was one of the main proponents of the idea.
The teams have investigated the eects of
refuelling returning and found these would be
almost entirely negative.
Asked if he still wanted it to return, Marchionne said: I do, but would reconsider if
ndings were denitive.
Marchionne said refuelling might be the
answer if combined with other changes under
consideration, such as freeing up tyre choice,
which is being discussed by teams and tyre
supplier Pirelli.
Marchionne said: You have to nd out the
impact that a combination of refuelling, tyre
changes and a variety of other changes are going to have on the sport.
Singularly it may not be the answer, but
combined with other things it might be.
He added: I am not sure what the ndings
are actually saying. Refuelling by itself has no
value other than the fact it adds variability to
the race.
Fuel loads, how many times you refuel,
when you refuel; they are all things that are
important.
Some people argue that you can come up
with a deterministic model that will make everyone refuel at the same time, which is absolute
hogwash. Especially if you combine that with a
higher degree of freedom on the choice of tyres,
which is I think is probably a lot more important than the refuelling strategy.
So, I think there is a willingness on behalf
of Pirelli to provide that exibility to the teams
which will create additional variability and will
make the sport interesting to watch.
The idea to bring back refuelling, which was
in the sport from 1994 to 2009, came out of a
meeting of the rule-making strategy group last
month. Marchionne and Donald MacKenzie,
the boss of commercial rights holders CVC were
its main proponents. -BBC

SPORTS BRIEFING
Lewis Hamilton wins Canadian
Grand Prix in uneventful race
Lewis Hamilton took a controlled victory
in the Canadian Grand Prix, fending off
team-mate Nico Rosberg.
The Mercedes drivers circulated at the
front throughout an unusually uneventful race as Williamss Valtteri Bottas beat
Ferraris Kimi Raikkonen to third.
After Hamilton led comfortably through
the rst part of the race, Rosberg came
at him after their sole pit stops, but the
world champion was never under threat.
Hamiltons fourth win in seven races extends his drivers championship points
advantage to 17.

The win helps to make up for Hamiltons

disappointment in the last race in Monaco, where he lost a dominant victory as a
result of a strategic error by the team.
Hamilton led into the rst corner from
pole position and built a four-second
lead before his pit stop and then controlled the gap at little over a second for
the rest of the race as the drivers of the
two silver cars managed fuel, brakes and
tyres to the nish.
Hamilton said: I love Montreal. I love
this track. I love this city. Really just a
fantastic weekend, great to get back on
the top step.
I didnt feel I had the most comfortable

balance, I had a bit too much understeer.

Nico was quick but I didnt feel under too
much pressure. I felt I could pull it out
when I needed to.
Did I need this? I think so.

Lingmerth beats Rose in Ohio

play-off, Woods nishes last
Swedens David Lingmerth beat Englands Justin Rose in a play-off as Tiger
Woods nished last of those who made
the cut in the Memorial Tournament.
Lingmerth, 27, held his nerve to win his
rst PGA title at the third extra hole after
carding a three-under par 69 to nish 15under in his nal round. American Jordan

Spieth hit a seven-under nal round 65

to tie for third with Italys Francesco Molinari (71). Woods carded a 74 after the
worst round of his career on Saturday in
Ohio. The former world number one was
14-over for the tournament and nished
29 strokes behind the leaders and eight
behind the rest of the eld. Woods, 39,
had recorded a 13-over 85 in Saturdays
third round to start from last place for
the rst time in his career in the nal
round. He appeared to be bouncing back
from his third-round nightmare as he
reached the turn in three-under for the
round, and then birdied the 11th before
his game fell to pieces.

Memorial Tournament winner David

Lingmerth. AFP

31

32

BUSINESS DAILY | Tuesday June 9, 2015

Your minute of the day

TOMORROW:

FIND US ON FACE BOOK & TWITTER

Opec meeting e-ams

global oil supply and pices
status quo

businessdailyafrica

BD_Africa

GEORGE WACHIRA
David Lingmerth,Memorial
Tournament winner, page 31

Irene Muloni,Uganda Energy

minister, page 9

IDEAS & DEBATE

www.businessdailyafrica.com

GLOBAL MARKET WATCH

DJ INDU
17,849.46
-56.12

FTSE 100
3,077.02
-7.74

XETRA DAX
11,150.18
-46.97

CURRENCY RATES
CAC 40
4,889.89
-30.85

FTSE MIB
22,831.36
-15.98

SMI PR
9,080.74
-24.28

HANG SENG
27,316.28
56.12

NIKKEI 225
20,457.19
-3.71

ALL ORD.
5,506.50
-4.81

SSE COMP.
5,131.88
108.78

S&P SENSEX
26,634.76
-133.73

$: 96.86
: 107.79
: 147.94

TSh
USh
SAR

22.31
32.05
7.80

Market Activity
LAST

MARKET CAP IN SH BN

unrest in which more than 30 people

have been killed, according to activists.

Al-Qaeda claims attacks

The North African wing of Al-Qaeda has
claimed two attacks on Algerian military
and security forces in the east of the
country that killed at least ve people,
the US-based SITE jihadist monitoring
service has said. Attacks are rarer in
Algeria since the end of its civil war with
Islamist militants in the 1990s. But AlQaeda in the Islamic Maghreb (AQIM) is
still active, and another splinter group
has pledged allegiance to Islamic State.
SITE said AQIM claimed responsibility
on a social media account for a roadside
bomb that killed an Algerian army
colonel and wounded two others..

Leader wants polls by August

Burundi opposition leader Agathon
Rwasa (above) says a presidential
election must be held by August at
the latest, but a fair vote was unlikely
without security and a free media. A
planned June 26 poll looks increasingly
untenable after more than a month
of protests against President Pierre
Nkurunzizas bid for a third term.
Parliamentary and local elections have
already been postponed due to the

Health
NEWS

Russian hostages freed

Authorities in Ghana have cleared

wreckage and braced for more rains, a
day after ooding and an explosion at a
gas station (below) killed 150 people in
Accra, the capital. Emergency workers
retrieved household goods from Accras
clogged storm drains while security
ofcials collected another body from a
house near the gutted downtown lling
station, witnesses said.

Two Russians held hostage in the

Sudanese region of Darfur were freed
in an operation by security forces on
Friday and their captors taken prisoner,
Sudanese authorities have said. The
kidnappers and their equipment are
under our control, Lieutenant General
Taj al-Sir Othman, a senior ofcer in
Sudans security agency, told reporters
at Khartoum airport where the hostages,
employees of airline UTair, were
own after their liberation. Russias
Ambassador to Sudan, Mirgayas
Shirinsky, said: The release took place
without violence or ransom payment.
The Russian Foreign ministry said the
hostages were in good health and had
been freed as a result of co-operation.

and a minutes silence was observed

at venues for the Southeast Asian
Games, which the city-state is hosting.
Spectators at SEA Games in Singapore
held a minutes silence before games
began yesterday.

Mers claims sixth victim

A sixth person has died after contracting
Middle East Respiratory Syndrome
(Mers) in South Korea, amid a sharp
rise in infections. More than 23 people
were conrmed to have contracted
the disease on Sunday, bringing the
total to 87. It is the biggest outbreak of
Mers outside the Middle East. About
2,300 people have been placed under
quarantine and nearly 1,900 schools
have been closed. Yesterday, a man in
his 80s became the latest to die of Mersrelated illness in Daejeon, about 140km
south of Seoul. On Saturday, a 75-yearold man died after contracting the virus.
He had been in a Seoul hospital when he
became ill.

Fire, oods kill 150 in Accra

Quake victims mourned

Singapore and Malaysias Sabah state
are observing a day of mourning for
those killed in the Mt Kinabalu quake.
Sixteen people are conrmed dead after
the magnitude 6.0 quake, which hit the
mountain in Sabah on Friday.
Among the dead were six Singaporean
children on a school trip, along with their
teacher and guide.
In Singapore, ags are at half-mast

Protesters disrupt polls

Protesters disrupted voters in some
parts of Mexico on Sunday, as they took
part in mid-term elections.
The run-up to the poll was also marked
by violence, with drug cartels blamed for
the deaths of several candidates.
Early results yesterday suggested that
Mexican President Enrique Pena Nieto
and his Institutional Revolutionary
Party would keep control of Congress,
according to Reuters Katy Watson.

Nestle sued over noodle scare

Criminals go for medical data

No benet in eating placenta

Indias government has led for damages

from food group Nestle after a food scare
involving reports of excess lead in Maggi
noodles forced a nationwide recall, government ofcials said. Its a serious matter concerning public health and the law
allows us to take legal steps, said one ofcial in the consumer affairs department of
the Food ministry.

US cybercriminals are increasingly targeting valuable medical records and personnel les. This data, experts say, is worth a
lot more to cybercriminals than, say, credit card information. Cyber investigators
from iSight Partners said they had linked
the recent US government hack to earlier
thefts of healthcare records from Anthem
Inc, a health insurance company.

There is no scientic evidence that eating

the placenta after childbirth can protect
women against depression and boost energy, US research suggests. Claims that
the placenta contains vitamins which
could benet a womans health have
increased interest in the practice. But a
review by Northwestern University found
no proven benets in the practice.

12001100

560,067,971

272,133,200

622,300,000

39,830,000

EQUITY TURNOVER IN SH

TOTAL DEALS (BONDS)

14

11

TOTAL DEALS (EQUITY)

1,523

1,237

4,761.44

4,784.07

NSE 20 SHARE INDEX

NSE ALL SHARE INDEX

162.53

163.78

FTSE NSE KENYA 15 INDEX

219.94

219.94

FTSE NSE KENYA 25 INDEX

219.77

219.77

FTSE NSE KENYA BOND INDEX

92.30

92.30

FTSE ASEA PAN AFRICAN INDEX 1,220.60

1,220.60

HE SAID
The great
accomplishments
of man have
resulted from
the transmission
of ideas of
enthusiasm.

- Thomas J. Watson
American businessman
(18741956)

Merkel: Set climate goals

German Chancellor Angela Merkel
urged the Group of Seven (G7) leaders
to commit to tough goals to cut
greenhouse gases at the nal day
of their summit in the Bavarian Alps
yesterday. Merkel, once dubbed the
climate chancellor, hopes to revitalise
her green credentials by getting the G7
industrial nations to agree on specic
emissions goals ahead of a larger yearend United
Nations climate
meeting in Paris.
Climate change
topped the
agenda for
yesterdays
sessions.

2,290.87

27433100

TOTAL SHARES TRADED

BONDS TURNOVER

PREVIOUS

2,273.34

Download the NMG PLAY app on Google Play

and scan this QR code with your smart phone
for pictures, videos and more stories

WEATHER
High 25C (78F) Low 140C (560F)

Nairobi: 3-day forecast

Tue
Wed
Thu

Mostly Sunny
Mostly Sunny
Mostly Sunny

High

Low

25C

14C

25C

14C

24C

16C