Saturday, February 24, 2007

Sasini's AGM

I find this story curious. The company only had its AGM yesterday to approve a share spilt-which already took place on the 14th of this month! I know the NSE has been desperate for business, but why can't they do things procedurally?
Other than that, I am encouraged that the tea and coffee companies are looking beyond growing and exporting tea and now thinking of doing value-adding. It has always seemed incredible that you get paid something like ksh9 per kilo of tea/coffee as a farmer, but a consumer in the West pays the equivalent of ksh300 for a cup of the same! Worse, the companies selling this cup of tea or coffee actually prefer to buy the raw beans or leaves straight from the farmer to keep the prices low; brand them so they can charge the premium and even go as far as taking legal action to stop the grower countries from branding their own product.

8 comments:

Ssembonge said...

Maina, I fail to understand your groups interest in the NSE. For Pete's sake, you guys have the LSE and the AIMS.

I can't wait for NASDAQ to get a piece of the over-valued LSE so that we can access to the European equities.

Kim said...

If kenya is one of the world's largest tea growers you would think that we would have much more control. Ebay has achieved much success because the buyer(s) bids on the item. We should look at Tea and coffee as much more valuable than commodities. O! well I might be preaching to choir here...

pesa tu said...

@ssembonge: LSE/AIMS info is easy to come by BUT NSE info is hard to get

MainaT said...

Ssembonge/Pesa-its simple, in 2006, NSE grew by 40% LSE grew by 10% and they were very happy about. Plus, its a way-however-for most us to keep in touch with what's really going on in the corporate world in Kenya our motherland. The fact is, some of us might end working back there over the next few years.
Kim-agree

Ssembonge said...

Maina, there is no place for emotions when it comes to investments. For that reason, if you are looking for higher returns there are many stable markets out there.

I've always been a big proponent of emerging markets, the returns are as good if not better than Kenya plus they have more 'stable' currencies.

NSE with all its shortcomings should be left for kenyans who have no access to other equity markets.

Have you guys considered RE investments?

Ssembonge said...

Kim, With the exception of oil, no country has been able to manipulate agricultural commodity prices by reducing the supply. If tea prices rise, people can easily switch to other substitutes. And Kenya has got little control over the tea markets.

There's a similar article regarding Brazilian sugar exports in this weekends Barron's.

MainaT said...

Ssembonge, I'd respond fully but that wouls probably take a lot of time and space so plse read some of our earlier posts on the very unemotional rationale for our group.
As for emerging markets-I've personally looked into the BRIC markets and the funny thing is that apart from India, there eerily similar issues to the NSE-perhaps not to the same degree, but there nevertheless.
Preemimnent investors like Benjamin Graham do urge investors to harness their emotions in when investing.

MainaT said...

As far as the tea & coffee goes, yes we don't have the same control, but there are many things we could to get more £/$ for our farmers. Branding (the world's best coffee grown in its natural environment, rich aroma of Kenyan tea etc) and value-adding (manufacturing, packaging and exporting Kenyan branded tea and coffee). Here is a paradox for you.
Kenco one of the most popular brands out in the West (UK anyway) is unknown to many as Kenya Coffee. Today if we tried selling Kenyan coffee as Kenco, we'd be sued for millions yet our sweat grows that stuff