Wednesday, December 12, 2007

2007 Review: Investment Highlights

KCIG highlights:Not to give away too much, we did fulfil Motley Fool's advise on stocks(aim higher than index). However, we underperformed vs. our own very reasonable target for the year due to choices made earlier in the year.
  • Nice surprises: We bought EABL as a defensive stock, but got a bonus issue and the post-bonus price is now around 25% higher than our initial buying price.
  • Greedy surprises: We bought more Equity after it went up 30% within a month and pretty much averaged our gains down. Not clever.
Broadly speaking however, the yr has been a success in other targets that we had set ourselves e.g. membership, funds raised etc. My experience of investment clubs is that coming together is the easy part,staying together is a tougher nut to crack.

Personal highlights: My portfolio has exceeded my expectations by someway with all green's except Barclays which I bought just after the spilt and mistimed courtesy of my broker. Of the greens, the best has to be NIC which I posted about the day I was buying. As soon as Kimunya's budget was out I ordered some NIC shares at then price of Ksh107 ostensibly to take advantage of the sure-fire rights issue only to be awarded with a bonus (pardon the pun) bonus issue. So far, 80%+ (not bad for six months). I also got DTK without quite the same result but then I want to hold both for 3yrs minimum (less if there is a regime change). Of the rest, HFCK was a juggling act. It was clear from a few yrs back that HFCK needed a capital-rich partner, having bought some when dead cheap, I somewhat wiped those gains by buying when it was in the 30s, then had to watch as the share started a downward spiral towards ksh20. At this price, I bought some to balance out the yr and just like that,  Equity/Britak stepped in and thus saved the day for me. Still, NSE for 2007 has one more act to be played courtesy of the Safaricom IPO and this may well wipe some peep's gains.
Away from the NSE, I've also been steadily increasing my exposure to the BRIC nations and that has gone very well so far.

Peeps, thanks for the company in 2007. Merry Xmas, enjoy the elections (a Kikuyu was praying for this the other day and you just had to be there it was that funny).

May God bless your endeavours in 2008. I know 2008 will a be humongous year....

2007 Review: Blogging Highlights

Blogging has been for me just a way of putting down mainly thoughts on the investment world, work, and minimal other stuff like issues appertaining to the motherland. One of the good things has been the ability to put down some of the stuff I research while I am doing my investing and geting feedback from readers. A repository if you like. With the yr coming to an end, I'll take a few weeks off and visit the motherland for some nyama choma with fried matoke and greens, sweet potatoes; introduce MT Jnr to his extended clan; catch some rays et al.

So why not go thru some of the highlights in blogsphere:
  1. Meet-ups: The reason d’etat for starting this blog was to give a then embryonic KCIG some PR so we could get more members. So it was ironic when a blogger posted comments asking us what we were doing at the NSE when we could go to FTSE or AIMS. Months later that blogger was enjoying some chapos at our house but then outdid himself by posting an embarrassing post on the same. I refer of course to the long-monikered Christopher Ssembonge. It was a pleasure meeting you bwana Ssembonge. I’ve also met several others and hope to do so as time goes by.
  2. Reading great blogs: As far as influences go I’d say CT stands out for me because of the passion, knowledge and in-depth understanding of the subject matters he writes about and especially those appertaining to required improvements for Kenya’s economy which are mostly on point. Bankele’s AGM coverage has been very informative and helpful for me as an investor. Riba Capital cleanly presented yet well-analysed and informative posts have been a joy to read (still waiting for the TC prospectus though). Away from investments, I’ve enjoyed reading Kenyaeconomics (still waiting for the his piece on inflation in Kenya), Kenya Imagine (I initially thought they were being typical know-it-all Diasporians but they are objective and have a good variety of excellent writers), Sunny’s column, the aforementioned LovelyMoney (this post was too funny) and Wakenya wa Sweden (one of my favourite countries in Europe).
  3. Bloggers I wish would post more often: Pesa Tu who has done some excellent posts (on Safaricom and Mobilitelea) and Equity vs. Barclays and KenyaEconomics I’d encourage to post more often as both have something fresh to say about investment and economy respectively. And the aforementioned CT who seems to post in peaks and very deep troughs
  4. Bloggers I wish would post less often: Kumekucha wins this category hands-down. To use your blog to disseminate tribal hatred (whether aimed at Giriamas, Kiuks, Luos, Kambas etc) would be the lowest of the low at any time, but at General Elections when temperatures are high anyway is not intelligent in my view. Let me tell you a secret, no politician in Kenya today cares about you. All will fill their baskets (bellies) first and then if the are leftovers will be open the gate for you to come in. Ask yourself where Kibaki has been as corruption has been on a runaway train, what pro-development bill even for Coast Raila has introduced to parliament similarly with Kalonzo. The best way to get ahead in life will be to develop the skills you need, find ways of growing you and your extended family during economic growth times so you can survive during any downturns.

Monday, December 10, 2007

Monday Shorts

Interview with stockskenya's fellows. Its a pity the interview is a bit on the short side and looks like the interviewer wasn't really sure what they did. Kudos to Mugambi and co for their work.

UBS is in fresh funk having now had to write-off an additional $10bn of those lousy home loans. This is equivalent to its 2006 profits and may mean it won't be making
 a penny this yr neither. Luckily for it, those cash hoarders in Middle and Far East will inject some 
of their easy oil money for a 12% stake. To the Americans and other western fascists, thank God for the
foreigners eh? Despite being the world's largest wealth manager with around £75bn in assets, UBS has never cut it in the investment bank world. The Russia/LTCM crisis, UBS had to write-off some serious bn, the hedge fund mess, UBS shut down its proprietary hedge business and now the credit 
crunch mess finds at the top of those writing off. Stick to wealth management.

One of amazing things about the UK-ians is their total lack of context. In the last couple of weeks, you'd have
thought Ricky Hatton was going to fight a jailbird or a complete novice in Floyd "Money May" Mayweather jnr.
The dude has always been rated among the Thomas Hearns and Sugar Ray Leonard's of this world so to
disrespect him as much as the media did here lacked context. Anyway, most papers today were eating massive amounts of humble pie led by Ricky Hatton himself who henceforth will use the words clever and Floyd Mayweather interchangeably.

NIC completes its entry into the NSE. Now let the fun and games begin seeing as these guys already have distribution.

Bring Safaricom already! Cash is awaiting its target.

Friday, December 07, 2007

Kenya's Corruption: an outsider's view pt

This guy is from Sierra Leone (now based in the UK) does very powerful documentaries on issues holding Africa back from fufiling its potential. This one is corruption, Kenyan-style.
  1. Building a shack in Kibera will cost you in bribes. Its clear, this guy was taken to the claeners once word got around that he ahd chumus or maybe he was doing this programme.
  2. This one features Kosgey, Moi's Kroll piece and Mwararia as the presenter calls him on that Githongo tape and scandal of Aids money.
  3. More of the Aids fund scandal featuring Margaret Gachara's Mcmansion. She ate well and of course should still be in jail.
Thanks to fellow blogger Ssembonge for the tip.

Thursday, December 06, 2007

Commodities futures?

I think this is where such a market might work. We seem to suffer surpluses because of lack of storage or transport. So why not get some players who can come in to provide the logistics (storage, distribution) within a regulated framework and trade off that?

UK interest rates: A stitch in time saves nine

Today's 0.25% cut brought some relief to many in the financial & retail sectors who were staring at a possible meltdown in mortgage borrowing, credit card spend, Xmas shopping not to mention higher repossessions. Thus half the economy will be feeling relieved that when the Bank of England find itself between a rock and a hard place (inflation is also approaching the set target of 2%), it decided to tackle the problem that would have wider ramifications of the two. Even with oil prices now well over the psychological barrier of £1.00, expect another rate cut within the next four months.

Someobody that worked in one of the investment banks that has written off around £4bn in subprime just over a month ago was saying that its credit risk team was worried about the issue, 
two years ago. Lakini these guys had to be seen to be playing with the big investment banks, so on they went the purchase of toxic instruments as they are now know.

When TC aka G29 speak about investments, the least one can do is to listen/read. A nice piece in the BDA today. I definitely second their advice on the need for formal meetings (pinting doesn't exactly led itself to great investment ideas does it?). One thing though, how come they've kept their prospectus hidden (ok, apart from fears of political hijackers) ?

How much of the news should you believe?

Jana I watched a newstory on that Delamere case and was astounded by the amount of outright lies that are weaved into "news". Ati this case has dominated the political campaigns in Kenya, that 4 cabinet ministers attended Njoya's funeral (I didn't know Koigi was a minister). That nyamachoma is used as a bribery tool-come again? Ati the political situation in Kenya makes it impossible for him to get a fair trial.

And this was on Channel 4 which is one of only two or three credible news channels in the UK.

Saturday, December 01, 2007

Safaricom is a "made in Kenya", sell it to Kenyans only

Opportunity capitalism needs to be a form of capitalism that Kenya embraces. In every decision, GoK should be ensuring that the benefits, participation of Kenyans 
is as wide as possible.

Its complete horlicks to say Kenya's economy can't handle Safcom OSF. It's like calling you know who the 2nd Mandela. Absolute cobblers.
  • Safcom's OFS might even be a solution to our inflation problem by vacuuming up all the excess liquidity in the economy if there is full subscription.
  • Michael Joseph somehow takes credit for turning the business into a17bn+ profit-taker, but the honest truth is that Kenyans have brought the dough, sugar, water,eggs, flavorings et al mixed up to cook the cake that is now Safaricom. Michael just put it in the oven.
  • The mobile phone sector has invigorated Finland's economy and has seen phenomena growth everywhere even US (despite slow initial uptake due to pagers).Its feeding a necessity that reflects a reality in the world.Today throughout this wonderful world, most families have somebody that lives a distance a way. That means the need for a handy communicator, step forward the mopho.
The 2nd pt as I mentioned is before is that this should be a Ksh60bn float and not Ksh35bn. That way, we'll all get some chance of full subscription. If GoK wants to value the 25% stake higher than that, then we may have to go to to the foreigners.

3rd point, lets do it this year (or at least kick it off) now and keep 2007 business for this year. Next year we can chase up other IPOs. The general election is a one day event. And we had I think three IPO-type events last Dec so the month is a none issue.

Mobilitelea should have been resolved, but somehow nobody went about it the right way which would have been to file a case in the UK as  a Vodafone shareholder.

Its made in Kenya, its our largest product with 8m customers, Kenya's economy needs more investors and 
savers so lets target at least a 1/4 of these customers to become shareholders/stock investors.