Thursday, March 13, 2008
As the convulsions keeping on blowing through the financial world, a wind chill is passing through London which still holds the financial centre mantle. Practically every investment banks has made a portion of its workforce redundant primarily the mortgage desks and its now spreading to back office. It'll shortly start hitting the high street banks. The issue is that since investment banks and others have discovered that they can't write-off their CDOs/CDS books without shutting shop, they've decided to sit on the stuff until the housing market in the US improves and that is not going to happen this yr. This then means that they can't underwrite IPOs, M&A, loan arrangements deals et al. Tough days. Most firms either use FIFO (first in, first out) or look at the highest paid when deciding on redundancies.
The scramble for Nyaga and other weak brokers will be intense among those banks that have been wanting to get into the business. I think Equity has got to be favorite for Nyaga's license especially given that most of the investors with Nyaga are from its natural playground of Central. If Equity with its customer base gets a license, its game over for many retail brokers.
Kiarie's move from BAAM is a big loss to it. He actually built the business from ground-level. I'm surprised BAAM let him go easily. He is the type those old-moneyed like Wairegi like employing i.e. very competent at what they do and not political.
Does Kenya have a food policy? What we are seeing in countries like Egypt, China could be a harbinger of food shortgages to come...