IMF chief Dominique Strauss-Kahn admitted that the Fund's policy advice had not always been right, and promised more streamlined lending practices as economic crisis forces more countries to seek help.
Addressing students at the University of Dar es Salaam, the International Monetary Fund`s managing director said sub-Saharan Africa would be more affected by the slowdown in world growth than by the systematic banking crisis hurting advanced economies.
He said African exports would suffer from falling global demand, lower prices for oil and commodities, and a fall in the supply of international financing.
The prospect that some African countries may have to go to the IMF for increased or new aid has unnerved many in the region who, rightly or wrongly, say the fiscal and structural medicine that it prescribed did their economies more harm than good.
Strauss-Kahn said the IMF was moving fast to increase financial support to affected countries, step up technical assistance, and streamline its lending conditions.
``It is true to say that, until recently, the idea of the IMF was: `When countries ask for resources we should also fix all of the problems in the country,`` he said.
``What I am trying to change now is to focus on the problem the country is facing that day, and not all of the problems in the history of the country.``
If a country faces fiscal imbalances, IMF conditions should not also emphasise the need for land reform, he said.
An IMF conference starting on Tuesday in the Tanzanian capital under the banner ``Changes`` seeks to reassure policymakers that the Fund wants to help preserve the economic and social gains of the last 10 years.
``I want to have a kind of a partnership with African countries which is ... different from what we had in the past,`` Strauss-Kahn said. ``It will be such a pity to see all of this destroyed by the crisis.``
An IMF report last week estimated that 22 developing countries would need at least $25 billion in extra financing this year, and possibly as much as $140 billion if the crisis intensifies.
And on Sunday, the World Bank said all the world's developing countries would need between $270 billion and $700 billion to deal with the effects of the global economic crisis.
An IMF report to be released on Monday focuses on Africa, warning that risks from the crisis are increasing and will get worse the longer the crisis lasts.
``Risks to the outlook are serious and mostly on the downside,`` the report says. ``The effects may be more pronounced this time because the tightening of global credit compounds the impact of the slowdown, exacerbating risks for trade finance and other capital flows.``
The IMF says policymakers ``must walk a tightrope between not aggravating the shock in aggregate demand on the one hand, while protecting hard won gains in economic fundamentals on the other``.
``Any policy response must also take into account the impact on the poor and seek to incorporate social safety nets,`` it says, adding that countries with low debt levels and no financing constraints may have some scope for fiscal easing.
``But it is also clear that countries will depend critically on donors honouring their commitments to aid and even increasing aid, despite new competing demands on their own budgets,`` it adds.
Strauss-Kahn said he was concerned that increased aid flows from big donors such as the United States and Europe will become difficult, if not impossible, despite commitments at a summit in 2005 to double aid to Africa by 2010.
Asked why the IMF did not warn rich countries about problems in their economies, Strauss-Kahn acknowledged that its advice tended to be ignored by advanced economies.
``The problem with early warnings is that you don't need only to warn early but you also need to be listened to,`` he said.
The IMF chief had earlier expressed optimism that Tanzania`s strong fiscal policy background would help it weather the heavy storms of the global economic crisis wreaking havoc in Europe and America.
He said the fact that Tanzania followed advice from his institution over the last decade, helped it build strong fiscal policies.
``Tanzania has good fiscal monetary policy which has been sustained for the last decade and can now be used to support economic growth`` he said.
The IMF boss is in the country on the Invitation of President Jakaya Kikwete, who today, is scheduled to chair a two-day meeting to discuss how African countries could sustain their economic gains amid the global financial crisis.
Among other high-profile personalities at the meeting will be the UN deputy secretary general Dr Asha-Rose Migiro, former UN secretary-general Kofi Anan and world acclaimed entrepreneur Mo Ibrahim.
2009-03-10 11:28:55
By Guardian Reporter
Tuesday, March 10, 2009
Sunday, February 15, 2009
Tanzania and China sign four economic agreements
2009-02-15 12:13:12
By Joyce Kisaka
Chinese President Hu Jintao arrived in Dar es Salaam last night, for a four-day official visit, leading a 140-strong delegation.
The Minister for Foreign Affairs and International Co-operation, Bernard Membe, told journalists in the city yesterday that the visit is aimed at consolidating relations between two countries, which date back to 1961, when Tanzania attained independence.
He said the visiting Chinese leader and his host, President Jakaya Kikwete, are scheduled to sign four economic agreements today, and also officiate at the inauguration of the new stadium built partly through Chinese government assistance.
Elaborating on the agreements, Minister Member cited areas to be covered as bilateral relations on economic issues between the two governments; bilateral relations on economic issues between the Chinese government and the Zanzibar government; initiation of a Youth Volunteer Programme between Tanzania and China; and bilateral relations between China`s Exim Bank and the Tanzania government.
The focus of the bank will be to provide credit for various local projects. The Minister said the Tanzania-Zambia Railway line (Tazara) will be one of the subjects of discussion between the two sides, partly as a follow-up to a pledge for assistance to the firm, made during President Kikwete`s visit to China last year.
Membe said Tanzania has 400 opportunities for exporting its products to China.
He explained that Tanzanian exports to China represent only 35 percent whereas it is 95 percent the other way round.
The Minister said later today, President Hu will meet Zanzibar President Amani Abeid Karume and tour the China cemetery at Majohe Gongolamboto. In the evening, he will attend a banquet hosted by President Kikwete in Dar es Salaam.
Tomorrow`s itinerary for the guest will include delivery of a speech on China`s co-operation with Africa, at the Diamond Jubilee Hall.
Friday, February 13, 2009
Football business: China president to launch new stadium Feb 15 in Dar es Salaam
THE new state-of-the-art stadium in Dar es Salaam is expected to be officially launched on February 15, the 'Daily News' has learnt. Impeccable sources say that Chinese President Hu Jintao is expected to grace the opening of the imposing facility during his forthcoming visit to Tanzania. A source told the 'Daily News' that organizers have planned colourful celebrations for the opening ceremony.
“The new facility would undoubtedly be a catalyst for sports renewal in the country, particularly in soccer and athletics. Not only will we have an all-purpose stadium, but there will also be additional economic benefits for the country,” he said, adding: “We are delighted that the Chinese leader will be here to join us in the celebrations,” said the source.
When reached for comments the Director of Sports in the Ministry of Information, Culture and Sports Leonard Thadeo could not confirm or deny the report. He said the Minister responsible for Sports was in better position to confirm the report.
Many sports enthusiasts believe that the completion of the ultra-modern 60,000-capacity sports stadium in the city, part of a new national sports complex, is expected to usher in an exciting and successful new era of sports tourism in Tanzania. The $56 million stadium (about 60bn/-) was funded largely by the government of China.
Beijing Construction and Engineering Group Company Limited are the main contractors of the facility. According to the stadium’s engineering consultant, Aloyce Mushi, the Chinese contractors are expected to finalise the cushioning of the running track on Tuesday. Mushi said the International Association of Athletics Federations (IAAF) envoy John Velzian, who is based in Nairobi, is expected to inspect the tartan that has been laid on the running track.
He will also cross check measurements for final certification. Velzian was in the country recently to inspect the tartan. He endorsed the material and the laying design, saying that the material conforms to IAAF specifications. “Certainly, everything will be fine because we have used ‘Electronic Distance Measure’ (EDM) device to take measurements. IAAF requires exact measurements be observed…if it is 100 metres, let it be that.
No room for approximation,” he said. Mushi further said that various athletics equipments that would be in use at the venue have arrived and would be on display during the official opening ceremony. “Equipments for field events such as javelin, hammer, shot put, high jump and long jump will all be on display,” said Mushi.
IAAF had refused to approve earlier material that was laid at the stadium, saying it was not of the required standard. This compelled the contractors to seek for the new approved material from China. However, the tartan delayed to arrive for almost one year, which led to an unanticipated delay in finishing the stadium.
Wednesday, February 11, 2009
China president visit Africa and Saudi Arabia
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Chinese President Hu Jintao launches a whistlestop tour of Saudi Arabia and Africa Tuesday in a trip expected to focus more on shoring up political ties and less on securing energy supplies.
Hu's one-week trip takes him to Saudi Arabia, China's biggest source of oil imports, but the four countries that he will then visit in Africa -- Mali, Senegal, Tanzania and Mauritius.
"The top Chinese leadership has spent a lot of time visiting oil-rich countries in the past," said Barry Sautman, a China expert at the Hong Kong University of Science and Technology.
"But it also has a deliberate policy of trying to send its leaders everywhere (in Africa), because the political influence of all African countries is important to support China in international forums."
China has in recent years worked hard to cultivate closer partnerships with Africa -- a move that has caused concern in the West as Chinese influence on the continent has grown.
Much of the world's attention has focused on China's drive to secure natural resources from African states -- including those spurned by the West such as Sudan -- to meet its huge energy demands.
But assistant Chinese foreign minister Zhai Jun insisted that Hu's visit to Africa -- his fourth since he came to power in 2003 -- and China's interest in the continent, was not dominated by oil or natural resources.
"We have a very good and profound traditional friendship with African countries and our cooperation is not limited to energy or resources cooperation," he told reporters on Friday.
Zhai said Hu would announce fresh assistance to African states during his trip, and pledged that Beijing would meet its target of doubling aid to the continent in the three years to 2009.
China has never publicised exactly how much assistance this entails.
Some in the West have criticised China's "no-strings-attached" attitude towards aid, accusing the Asian giant of plundering Africa's resources with no regard for political, environmental or social consequences.
Adama Gaye, an associate researcher at John Hopkins University in the United States and author of a book on Sino-African relations, said China's approach could backfire if it didn't address some of these concerns.
"It must avoid appearing to be allied with the continent's retrograde forces, as (Africa's) civil society is looking for more transparency in its relations and the end of purely government-centered relations," he said.
Zhai defended China's role in Africa.
"Cooperation is based on mutual benefit, it serves the interests of both China and people in Africa who have benefited greatly from the cooperation," he said.
China's trade with Africa increased to 106.8 billion dollars last year from just under 40 billion dollars in 2005, according to the Chinese commerce ministry.
The World Bank has also spoken out in support of China, saying its increased presence in Africa had led to a massive infrastructure revolution there that was vital to reducing poverty.
Sautman said Hu's visit was also aimed at quelling rumours that China was going to retreat from Africa due to the global economic crisis.
"Some people actually say this provides an opportunity for China to further displace Western influence on Africa," he said.
The trip was also a "nudge and wink" to the four remaining African states -- Burkina Faso, Gambia, Swaziland and Sao Tome and Principe -- that recognised China's rival Taiwan, where the Nationalists fled after losing a civil war in 1949, Gaye said.
For Saudi Arabia, trade between the two has also increased substantially over the past few years, totalling 36 billion dollars for the first 10 months of 2008, compared with 16 billion dollars in 2005, official figures show.
Zhai said Friday that some energy documents with the Saudi Arabia could be signed if "negotiations went well."
Tuesday, February 10, 2009
Dar es Salaam set for major IMF conference
IMF Managing Director Dominque Strauss-Kahn discusses on the upcoming conference with a group of African ambassadors and diplomatic representatives at IMF Headquarters in Washington,last week. The conference,to be held on March 10 and 11, in Dar es Salaam,will focus on the continent's recent economic successes and on the impact of the financial crisis on Africa.(By courtesy of IMF)
STAFF WRITER, 6th February 2009 @ 02:31
TANZANIA will next month host a high-level conference scheduled to discuss the impact of the global financial crisis on the African continent. The conference being jointly organised by the International Monetary Fund (IMF) and the government of Tanzania, would be held in Dar es Salaam from March 10-11.
IMF Managing Director Dominique Strauss-Kahn said over the weekend that the theme of the conference is: "Changes: Successful Partnerships For Africa's Growth Challenge." He said the objective of the conference is to discuss the impact of the financial crisis on Africa and, at the same time, learn from the continent's successful economic experiences in recent years, especially in terms of macroeconomic stability and growth.
"The focus of the current financial crisis has been on the advanced and emerging economies, but the impact on Sub-Saharan Africa will be equally severe. "The crisis will affect African countries, but the region is in much better shape to weather the crisis than in the past, thanks to several years of responsible economic management," the IMF chief was quoted as saying in a statement made available to 'Business Standard'.
The conference is expected to attract finance ministers and central bank governors from all over Africa, prominent academics, the private sector and civil society. President Jakaya Kikwete and Mr Strauss-Kahn, would be among the key speakers at the conference, where strategies to strengthen the partnership between Africa and the IMF, are to be discussed.
"It will be an opportunity to assess what we have learned from past successes as well as what needs to be changed while going forward," Mr Strauss-Kahn said. In its World Economic Outlook (WEO) report released on Wednesday, IMF said growth in the world economy will fall to its lowest annual rate since World War II in 2009.
It said overall global growth will fall to 0.5 per cent this year with the world's most advanced economies -- in North America, Europe, and East Asia -- leading the plunge. The Fund said world economic growth should bounce back to three per cent in 2010, but warned that the possibility of a more severe decline of greater duration cannot be dismissed, according to the IMF's WEO for 2009.
"The uncertainty surrounding the outlook is unusually large," the report asserted. "Downside risks continue to dominate, as the scale and scope of the current financial crisis have taken the global economy into uncharted waters." One measure of that uncertainty was the steep downward projections of the new estimate itself, compared to the previous WEO issued by the IMF nearly two months after the collapse of the investment firm, Lehman Brothers, which sharply accelerated the crisis.
Average growth rates for all advanced economies will fall well into negative territory at minus two per cent on average, according to the WEO. Worst hit will be the newly industrialised Asian economies -- South Korea, Singapore, Hong Kong, and Taiwan -- whose combined growth rate will fall to minus 3.9 per cent, but Britain and Japan, at minus 2.8 per cent and minus 2.6 per cent, respectively, will not be far behind.
As for the United States, where most of the so-called "toxic" assets responsible for the ongoing financial crisis originated, the IMF predicted a negative 1.6 per cent growth rate this year before a revival to plus 1.6 per cent in 2010. Developing countries will also suffer due to the contraction of credit and demand brought on by the crisis, although their growth rates overall should remain in positive territory.
Sub-Saharan Africa should grow at a 3.5 rate this year, down from 5.4 per cent in 2008, while Latin America's growth in 2009 will be substantially more anemic, at just 1.1 per cent, down from 4.6 per cent last year. The latest report comes as governments around the world are trying to stimulate their economies in ways that will overcome the credit crunch resulting from the insolvency of banks or their reluctance to lend money at such an uncertain time.
According to a second report released by the IMF, global bank losses from toxic US assets may reach 2.2 trillion dollars, up from a 1.4 trillion-dollar estimate issued just three months ago. US President Barack Obama has spent much of his first week in office lobbying Congress for an 825-illion-dollar economic stimulus package that he hopes will restore the flow of credit and pull the economy out of what many have called the worst financial crisis since the Great Depression.
Some experts, however, say it is unlikely to be sufficient given the depth of the crisis and the rapid growth in unemployment, which could go as high as 10 per cent by next year, according to recent estimates.
The IMF, which is itself trying to carve out a bigger role as a source of quick lending to countries affected by the crisis, stressed in its report that efforts to date have only addressed the immediate threats to the financial system and "done little to resolve the uncertainty about the long-term solvency of financial institutions." It called for countries to set up public agencies to dispose of bad debts held by financial institutions in a definitive manner.
Tulawaka mine achieves record output
STAFF WRITER, 6th February 2009 @ 02:58
THE Tulawaka Gold Mine in Kagera Region produced a record 211,373 ounces of gold for the year ended December 31, 2008, which reflects an 18 per cent rise over 2007 output."This increase is particularly noteworthy given that it occurred during a year, in which the mine was transformed from an open pit to underground operations, a change usually associated with a decrease in production" said Paul Girard, Chairman and CEO of MDN in a statement.
He said for the year 2008, the mill processed 381,789 tonnes of ore at an average grade of 18 g/t gold and at a recovery rate of 95.5 per cent.Total cash costs for the year averaged 212 US dollars to produce an ounce of gold, compared with 271 US dollars in 2007. The Tulawaka gold production now totals 654,367 ounces since the beginning of operations in March 2005.
For the year 2008, a total of 212,913 ounces of gold have been sold, entirely in the spot market, at an average price of 880 US dolars per ounce compared to an average price of 709 per ounce in 2007, for total sales of 187.4 million US dollars.
Since the beginning of operations in March 2005, a total of 646,078 ounces of gold have been sold. For the fourth quarter 2008, which represents the first quarter of full production from the underground mine, Tulawaka produced 28,565 ounces of gold.
The mill processed 102,428 tonnes of ore at an average grade of 9.3 g/t gold and at a gold recovery rate of 93.3 per cent. Total cash costs averaged US$323 to produce an ounce of gold.For this first quarter of full underground production, operations and mining of the underground gold deposits were limited by the construction of the new underground access ramp.
During the fourth quarter, 30,153 ounces of gold were sold into the spot market at an average price of US$803 for total sales of US$24.2 million.The Tulawaka project is a joint-venture between MDN (30%) and Pangea Goldfields Inc. (70 per cent), a wholly owned indirect subsidiary of Barrick Gold Corporation and project operator through its Tanzanian subsidiary Pangea Minerals Ltd.
The information disclosed on the Tulawaka Gold Mine is based on information provided by the Operator.MDN Inc. is a Montreal-based Canadian exploration company that holds a 30 stake in the Tulawaka Gold Mine (Tanzania). Its main exploration activities are carried out in Quebec through gold and base metal interests and in Tanzania through a majority interest in 35 adjacent mineral licenses.
Wednesday, February 4, 2009
Customers up in arms after GTV closure
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Tuesday, February 3, 2009
The Tanzania Communications Regulatory Authority (TCRA) has given GTV Tanzania up to 10.00 am today to explain how it is going to compensate its customers following the company’s liquidation. Reports in international media over the weekend had it that Gateway Television (GTV) of UK has closed down after going bust.
The abrupt termination of GTV leaves behind millions of angry subscribers and jobless people across 22 African countries, including Tanzania. TCRA directive has come at a time when a law firm, FB Attorneys, representing dozens of its customers, gave the GTV Tanzania limited 24 hours (from yesterday ) to pay 134m/- or face legal consequences.
Public Relations Manager of TCRA Innocent Mungy, said that the authority had summoned the company and given them the directive. “One of our responsibilities is to protect the rights of the consumers. We therefore summoned the company officials and demanded explanations from them on how are they going to compensate the consumers.
“We want the explanations by 10.00 am tomorrow (today),” Mr Mungy told the 'Daily News' over the phone yesterday. According to him, the officials of the company told TCRA that they were holding meetings to discuss the matter. GTV Tanzania is owned by Tanzanians (51 per cent) and GTV Holding Ltd from Mauritius (49 per cent).
Mr Mungy said that they had directed GTV to publish a statement to show how they would treat their customers and submit to TCRA the number of customers they had and how they would settle their claims. In another development, in a strongly worded demand notice, Advocates Fayaz Bhojani and Gaudiosus Ishengoma, made it very clear that if GTV does not respond within the said time, the matter would be taken to court for legal adjudications.
The advocates stated in the letter yesterday that GTV have been paid in advance 134m/- and despite repeated requests and follow-ups for refund of the liability, it failed, ignored or neglected to settle the liability. “Now upon the instruction of our said clients, we FB Attorneys for and on behalf of our clients, hereby demand from you payment of 134m/- together with accrued interest thereon, in accordance with commercial practices and recovery costs incurred by our client within 24 hours of the date of this letter,” the advocates said.
USD 1.5bn to cushion Africa`s banks - AfDB
2009-02-04 11:04:16
By Joyce Kisaka, Addis Ababa
The African Development Bank (AfDB) has set up a USD 1.5billion Emergency Facility to meet urgent liquidity needs of various sectors and institutions, which the global financial crunch will hit.
AfDB President Dr Donald Kaberuka told journalists here after giving a statement at the Assembly of the African Union on the Economic Impact of the Global Financial Crisis that, as a bank, they have taken several initiatives to rescue the continent`s financial sector in case of liquidity problems.
He said the Fund would be available to African banks facing liquidity problems.
Regarding the procedure to follow when applying for support, the AfDB boss said, the particular financial institution will be required to request from the bank specifically for ``rescue money.``
Kaberuka said the AfDB has also set aside a USD 1 billion trade financing facility, aimed at ensuring there is no disruption of operations of the sector taking into account that the global credit crunch has crippled the ability and appetite of international banks to finance trade in Africa and elsewhere in the world.
He said the bank has the capacity to scale up its activities because it has emerged from the on-going crisis as a strong institution, adding that over the next few months the bank will examine ways to stimulate global growth, get credit moving and ensure transparency.
``Its now widely accepted that in this process Africa must be a full partner to ensure that the debate is extended to those issues on which our countries have a stake,`` said Kaberuka.
He said African countries have done all the right things for two decades to reform their economies and that efforts were being made to overcome emerging challenges brought by globalization and international economic integration.
On growth of African economies in general, he said, the bank`s assessment is that in 2009 African economies as a whole will grow at about 4 per cent, with Sub Sahara Africa growing at around 1 per cent.
By Joyce Kisaka, Addis Ababa
The African Development Bank (AfDB) has set up a USD 1.5billion Emergency Facility to meet urgent liquidity needs of various sectors and institutions, which the global financial crunch will hit.
AfDB President Dr Donald Kaberuka told journalists here after giving a statement at the Assembly of the African Union on the Economic Impact of the Global Financial Crisis that, as a bank, they have taken several initiatives to rescue the continent`s financial sector in case of liquidity problems.
He said the Fund would be available to African banks facing liquidity problems.
Regarding the procedure to follow when applying for support, the AfDB boss said, the particular financial institution will be required to request from the bank specifically for ``rescue money.``
Kaberuka said the AfDB has also set aside a USD 1 billion trade financing facility, aimed at ensuring there is no disruption of operations of the sector taking into account that the global credit crunch has crippled the ability and appetite of international banks to finance trade in Africa and elsewhere in the world.
He said the bank has the capacity to scale up its activities because it has emerged from the on-going crisis as a strong institution, adding that over the next few months the bank will examine ways to stimulate global growth, get credit moving and ensure transparency.
``Its now widely accepted that in this process Africa must be a full partner to ensure that the debate is extended to those issues on which our countries have a stake,`` said Kaberuka.
He said African countries have done all the right things for two decades to reform their economies and that efforts were being made to overcome emerging challenges brought by globalization and international economic integration.
On growth of African economies in general, he said, the bank`s assessment is that in 2009 African economies as a whole will grow at about 4 per cent, with Sub Sahara Africa growing at around 1 per cent.
Sunday, February 1, 2009
Are we ready to face the coming economic CHANGE, and how?
It is no longer a question of when, but question of how deep the current global economic meltdown will entrench itself. The meltdown is rooting itself deeper on the global economies, and the impact is unequivocally spreading amongst the economically elite, while hitting harder amongst the economically disadvantaged.
Not an American or the Western mantra anymore, it is global. Central Banks across all continents have pumped enormous amounts of money to stimulate their economies in vain; there is a slow growth across the board, and there is little a common man can do to avert or reverse the trend, except being able to adjust to this inevitable and unwanted change. Economic CHANGE, that is.
Multinationals are laying-off massively, across all sectors. Announcement of retrenchments have become a routine, as companies are no longer able to maintain expensive payrolls, which have in turn affected consumer spending (consumption) and battered economies around the globe. Basically, people are holding tight their savings to counter any eventualities, if at all they have anything to hold on to.
Healthcare sector which is normally resilient to most recessions has finally been infected by this economic virus. Merck, a global pharmaceuticals giant for example, is laying-off 15% of her workforce in order to adapt to the economic CHANGE -consumer reduction of non- essential spending must bear the blame- and this could just be the beginning of a long trend in the sector, caused by the shaken labor market which is tightening even more.
Around the month of October, 2008 a client and a friend, who ran a two generation family business he inherited 25 years ago from his father, had to shut the company doors, and letting go of his 56 loyal employees. 35million dollars, of the company that was invested through a hedge fund firm melted away.
The man could not live to reconcile with a reality of orchestrating the demise of once, a healthy and prosperous company. He shouldered the responsibilities and regarded himself as a traitor to his predecessors who handed him a growing company, and to his children who were the future heirs to the multimillion dollar company. He decided to take his own life this past weekend, becoming one of the casualties of the current economic crisis.
Recently, a Tanzanian living in West Virginia, wrote me a very convincing letter, in which he claimed to have known me and my family back in Tanzania, and was requesting a small help of $300 he needed –his two month portion- to pitch into the monthly pool of $750 shared amongst five roommates. I made an effort and visited him; and his story could not be more painful.
His family in Tanzania including his mother who is ailing from diabetes, kissed goodbye the monthly allowance of $500 he has been sending for the past 4 years, 3 months ago. The Youngman is now worried not only for his mother who may die at any time, but also for his own future.
With his four other roommates hailing from West African nation of Gambia, they are bonded and supporting each other under the umbrella of African brotherhood, in the middle of racially sensitive town of Kay moor. These five African immigrants share something in common; they are all jobless, and none has a prospect of securing a job any time soon, despite the fact that, they are able, and ready to do any kind of work.
They were laid-off 5 months ago, from a coal plant where they met and worked. They have now depleted their savings, and neither one is in position to send money back to Tanzania or Gambia. All they are doing at this point is finding how to survive, and adapting to the new CHANGE of economic hardship.
Similar stories are everywhere. In Mumbai India, once lucrative American service centers that employed hundreds of thousands are closing. In New-York, and elsewhere within the US, joblessness, and homelessness among undocumented immigrants and Americans is Intimidating; some of the once highly paid professionals in different sectors are also in the jobless pack.
In Japan, the so called economic elites are struggling to pay their bills, in South Africa, the poor are sinking deeper into economic quandary, even in Dar es Salaam, I believe millions are experiencing the pain, and things are not getting any better.
There is no need to panic; things are going to turn around in not too distant future, but in the meantime, we need to make adjustments necessary to cope with this inevitable and unprecedented economic CHANGE.
Tanzanians in Diaspora remits millions of dollars a year back home to support their families, and at this time when some of their Western employers are worried about themselves too, cloud of uncertainty hangs over their employment future. As such, need to prepare psychologically for the inevitable is a matter of urgency.
Negative effects of either reduction or a complete halt to the remittance, may have some undesirable consequences to the people of Tanzania and the economy as a whole. In reality, I tend to see a dwindling and perhaps economic hardship of different proportion both to our fellow citizens abroad and those at home. Lifestyles across all social divides are going to be affected, because we all depend on each other for one reason or another.
I am therefore, counseling my people to adjust to the impending economic CHANGE by re-aligning their spending habits. Unnecessary spending must be avoided. Extreme extravagancy and flashy lifestyles must be controlled or put be put on hold for the time being. Nonetheless, we must not stop from going about our daily business while holding tight whatever little we may have. This should be the time for our national motto of brotherhood to shine by holding each other wherever we are, especially the economically vulnerable.
Although the current hardship bear hallmarks of a 1930 great depression, it will be far fetched to describe the current economic debacle as a depression, because there are some elements missing to call it a full blown depression. However, should the matter continue in the same pace, we will soon enter into a depression, whose effects will be tragic and devastating.
The 1930’s, great depression shook both rich and poor, it wiped savings, trimmed earning power of millions, and shut down well established businesses. Government agencies across the world suffered acute revenue shortages. The depression brought about horror and hopelessness amongst millions of pensioners in different nations, while thousands committed suicide because they could not bear the brunt, and never prepared themselves psychologically to deal with the harsh economic CHANGE.
Naturally, change is received with mixed feelings; in normal circumstances, some will resist it, while some will embrace it, depending on whose interest is at stake. But in extreme “situations” such as now, everybody willingly or unwillingly, MUST accept it. No one can resist it.
While I remain optimistic on the economic recovery, I am at the same time, cautioning those who believe that Tanzania is immune to these challenges to think twice; it is a matter of time before every single person directly or indirectly, feels the pain of the economic dilemma we are in. We must also be mindful of the fact that, whatever affects one directly, for some reasons, affects all of us indirectly, especially economically.
Even though I categorically acknowledge, and respect the existence of legitimate, ideological and philosophical differences, I am rather, urging prudence and rational reasoning from all us while debating this issue based on its substance and national importance, as opposed to personal differences that may exist.
Mungu Ibariki Tanzania
By John Mashaka
Mashaka.john@yahoo.com
Not an American or the Western mantra anymore, it is global. Central Banks across all continents have pumped enormous amounts of money to stimulate their economies in vain; there is a slow growth across the board, and there is little a common man can do to avert or reverse the trend, except being able to adjust to this inevitable and unwanted change. Economic CHANGE, that is.
Multinationals are laying-off massively, across all sectors. Announcement of retrenchments have become a routine, as companies are no longer able to maintain expensive payrolls, which have in turn affected consumer spending (consumption) and battered economies around the globe. Basically, people are holding tight their savings to counter any eventualities, if at all they have anything to hold on to.
Healthcare sector which is normally resilient to most recessions has finally been infected by this economic virus. Merck, a global pharmaceuticals giant for example, is laying-off 15% of her workforce in order to adapt to the economic CHANGE -consumer reduction of non- essential spending must bear the blame- and this could just be the beginning of a long trend in the sector, caused by the shaken labor market which is tightening even more.
Around the month of October, 2008 a client and a friend, who ran a two generation family business he inherited 25 years ago from his father, had to shut the company doors, and letting go of his 56 loyal employees. 35million dollars, of the company that was invested through a hedge fund firm melted away.
The man could not live to reconcile with a reality of orchestrating the demise of once, a healthy and prosperous company. He shouldered the responsibilities and regarded himself as a traitor to his predecessors who handed him a growing company, and to his children who were the future heirs to the multimillion dollar company. He decided to take his own life this past weekend, becoming one of the casualties of the current economic crisis.
Recently, a Tanzanian living in West Virginia, wrote me a very convincing letter, in which he claimed to have known me and my family back in Tanzania, and was requesting a small help of $300 he needed –his two month portion- to pitch into the monthly pool of $750 shared amongst five roommates. I made an effort and visited him; and his story could not be more painful.
His family in Tanzania including his mother who is ailing from diabetes, kissed goodbye the monthly allowance of $500 he has been sending for the past 4 years, 3 months ago. The Youngman is now worried not only for his mother who may die at any time, but also for his own future.
With his four other roommates hailing from West African nation of Gambia, they are bonded and supporting each other under the umbrella of African brotherhood, in the middle of racially sensitive town of Kay moor. These five African immigrants share something in common; they are all jobless, and none has a prospect of securing a job any time soon, despite the fact that, they are able, and ready to do any kind of work.
They were laid-off 5 months ago, from a coal plant where they met and worked. They have now depleted their savings, and neither one is in position to send money back to Tanzania or Gambia. All they are doing at this point is finding how to survive, and adapting to the new CHANGE of economic hardship.
Similar stories are everywhere. In Mumbai India, once lucrative American service centers that employed hundreds of thousands are closing. In New-York, and elsewhere within the US, joblessness, and homelessness among undocumented immigrants and Americans is Intimidating; some of the once highly paid professionals in different sectors are also in the jobless pack.
In Japan, the so called economic elites are struggling to pay their bills, in South Africa, the poor are sinking deeper into economic quandary, even in Dar es Salaam, I believe millions are experiencing the pain, and things are not getting any better.
There is no need to panic; things are going to turn around in not too distant future, but in the meantime, we need to make adjustments necessary to cope with this inevitable and unprecedented economic CHANGE.
Tanzanians in Diaspora remits millions of dollars a year back home to support their families, and at this time when some of their Western employers are worried about themselves too, cloud of uncertainty hangs over their employment future. As such, need to prepare psychologically for the inevitable is a matter of urgency.
Negative effects of either reduction or a complete halt to the remittance, may have some undesirable consequences to the people of Tanzania and the economy as a whole. In reality, I tend to see a dwindling and perhaps economic hardship of different proportion both to our fellow citizens abroad and those at home. Lifestyles across all social divides are going to be affected, because we all depend on each other for one reason or another.
I am therefore, counseling my people to adjust to the impending economic CHANGE by re-aligning their spending habits. Unnecessary spending must be avoided. Extreme extravagancy and flashy lifestyles must be controlled or put be put on hold for the time being. Nonetheless, we must not stop from going about our daily business while holding tight whatever little we may have. This should be the time for our national motto of brotherhood to shine by holding each other wherever we are, especially the economically vulnerable.
Although the current hardship bear hallmarks of a 1930 great depression, it will be far fetched to describe the current economic debacle as a depression, because there are some elements missing to call it a full blown depression. However, should the matter continue in the same pace, we will soon enter into a depression, whose effects will be tragic and devastating.
The 1930’s, great depression shook both rich and poor, it wiped savings, trimmed earning power of millions, and shut down well established businesses. Government agencies across the world suffered acute revenue shortages. The depression brought about horror and hopelessness amongst millions of pensioners in different nations, while thousands committed suicide because they could not bear the brunt, and never prepared themselves psychologically to deal with the harsh economic CHANGE.
Naturally, change is received with mixed feelings; in normal circumstances, some will resist it, while some will embrace it, depending on whose interest is at stake. But in extreme “situations” such as now, everybody willingly or unwillingly, MUST accept it. No one can resist it.
While I remain optimistic on the economic recovery, I am at the same time, cautioning those who believe that Tanzania is immune to these challenges to think twice; it is a matter of time before every single person directly or indirectly, feels the pain of the economic dilemma we are in. We must also be mindful of the fact that, whatever affects one directly, for some reasons, affects all of us indirectly, especially economically.
Even though I categorically acknowledge, and respect the existence of legitimate, ideological and philosophical differences, I am rather, urging prudence and rational reasoning from all us while debating this issue based on its substance and national importance, as opposed to personal differences that may exist.
Mungu Ibariki Tanzania
By John Mashaka
Mashaka.john@yahoo.com
Saturday, January 24, 2009
US Pres. Barack Obama letter to East African Presidents: Accountablity brings development
Dear Sirs,
Thank you for your support during my campaign and the kind words of encouragement and counsel in the last few weeks.
Kenya is the home of my father and I am not averse to being called a Kenyan- American and by extension an East African-American, it is with this background that I write to you gentlemen.
Gentlemen, we stand on the cusp of history.
Our region is a much more peaceful place than it was 20, 10 or even five years ago, but unrepaired hearts continue to simmer under the surface.
This has allowed the region to begin to harness the minds of its sons and daughters to drive progress and yet poverty continues to dog our every step. We are only just beginning to appreciate the true potential under our soils but our efforts to exploit these may be scuttled by greedy bureaucrats and corrupt businessmen.
Gentlemen, we need to reassess our ambitions and reposition our legacy.
I write to you in salute of your efforts at East African Cooperation and also to lend my hand in furthering this cause that will bring us together as brothers and do away with the artificial boundaries that have no basis in culture or logic.
Beyond sentimentality, the reestablishment of the East African Community is our best hope of maintaining our relevance in a world that is moving and changing fast, leaving the weak nations behind and enriching the people of organised, determined and focused nations.
We need to inject a sense of urgency into forging our people together as one common market with no barriers to the movement of labour, capital or ownership of property and land.
I have at least four years, at most eight, in office, I have inherited an economy on its knees and a country groping to regain its preeminence in world affairs, but even with these limitations America can still do good for East Africa.
American capital can help extend your infrastructure – road, railway, power and communication networks, the key ingredients necessary to meld a people into one, to set the engines of commerce in motion and bring wealth and prosperity to our people.
American science and technology can help in boosting your agriculture, improving the health of our people and widening the scope of your education system, because after all what is a nation without its people.
Given an unfettered market the size of which you aspire to, American entrepreneurship can fire up your manufacturing sector and power up your service industries creating hundreds, thousands even hundreds of thousands of jobs for our people.
Gentlemen the lifting up of our people out of the desperation of poverty and ignorance should be our ultimate goal. That is what will ensure that our legacy will endure beyond our children and our children’s children.
But gentlemen this dream can only come about through clean and accountable government.
Without clean governments the costs of doing business will rise and make East Africa unattractive for commerce and trade.
Whereas America, through its various agencies may send money to your countries, it is harnessing the power of corporate America that will have a more lasting and sustainable impact on our people.
The curve of history has not been kind to our region. We have suffered brutal dictators, kleptocratic despots and genocidal generals but we are still here.
That should count for something.
Gentlemen it is your duty, in fact your obligation to turn things around to clean your houses of corruption, nurture and oversee efficient governments that can deliver the services that will see our people to the promised land.
America and I, can help you in this historic mission but I need you to help me to hel you.
God Bless America. God Bless East Africa.
Barack Obama
President of the United States of America
CC President Mwai Kibaki
CCPresident Yoweri Kaguta Museveni
CC President Jakaya Kikwete
CC President Paul Kagame
Thank you for your support during my campaign and the kind words of encouragement and counsel in the last few weeks.
Kenya is the home of my father and I am not averse to being called a Kenyan- American and by extension an East African-American, it is with this background that I write to you gentlemen.
Gentlemen, we stand on the cusp of history.
Our region is a much more peaceful place than it was 20, 10 or even five years ago, but unrepaired hearts continue to simmer under the surface.
This has allowed the region to begin to harness the minds of its sons and daughters to drive progress and yet poverty continues to dog our every step. We are only just beginning to appreciate the true potential under our soils but our efforts to exploit these may be scuttled by greedy bureaucrats and corrupt businessmen.
Gentlemen, we need to reassess our ambitions and reposition our legacy.
I write to you in salute of your efforts at East African Cooperation and also to lend my hand in furthering this cause that will bring us together as brothers and do away with the artificial boundaries that have no basis in culture or logic.
Beyond sentimentality, the reestablishment of the East African Community is our best hope of maintaining our relevance in a world that is moving and changing fast, leaving the weak nations behind and enriching the people of organised, determined and focused nations.
We need to inject a sense of urgency into forging our people together as one common market with no barriers to the movement of labour, capital or ownership of property and land.
I have at least four years, at most eight, in office, I have inherited an economy on its knees and a country groping to regain its preeminence in world affairs, but even with these limitations America can still do good for East Africa.
American capital can help extend your infrastructure – road, railway, power and communication networks, the key ingredients necessary to meld a people into one, to set the engines of commerce in motion and bring wealth and prosperity to our people.
American science and technology can help in boosting your agriculture, improving the health of our people and widening the scope of your education system, because after all what is a nation without its people.
Given an unfettered market the size of which you aspire to, American entrepreneurship can fire up your manufacturing sector and power up your service industries creating hundreds, thousands even hundreds of thousands of jobs for our people.
Gentlemen the lifting up of our people out of the desperation of poverty and ignorance should be our ultimate goal. That is what will ensure that our legacy will endure beyond our children and our children’s children.
But gentlemen this dream can only come about through clean and accountable government.
Without clean governments the costs of doing business will rise and make East Africa unattractive for commerce and trade.
Whereas America, through its various agencies may send money to your countries, it is harnessing the power of corporate America that will have a more lasting and sustainable impact on our people.
The curve of history has not been kind to our region. We have suffered brutal dictators, kleptocratic despots and genocidal generals but we are still here.
That should count for something.
Gentlemen it is your duty, in fact your obligation to turn things around to clean your houses of corruption, nurture and oversee efficient governments that can deliver the services that will see our people to the promised land.
America and I, can help you in this historic mission but I need you to help me to hel you.
God Bless America. God Bless East Africa.
Barack Obama
President of the United States of America
CC President Mwai Kibaki
CCPresident Yoweri Kaguta Museveni
CC President Jakaya Kikwete
CC President Paul Kagame
Friday, January 23, 2009
We will not refund radar cash, says UK
y Christopher Kidanka
The United Kingdom will not compensate Tanzania for the loss incurred in the controversial 28 million sterling pounds (about Sh50 billion) radar purchase deal, its High Commissioner said yesterday.
Speaking in an exclusive interview with The Citizen in Dar es Salaam, the outgoing UK High Commissioner to Tanzania, Mr Phillip Parham, said though his country was aware that the price of the radar had been inflated, it would not entertain Tanzania�s plea for compensation.
Mr Parham, who is leaving next week after serving in Tanzania for three years, said the extra money was paid out as commission and bribes to the officers who were involved in the deal and "they are the ones who should repay the money."
He added: "Britain's Serious Fraud Office (SFO) is investigating the matter and the PCCB (Prevention and Combating of Corruption Bureau) is doing the same in Tanzania, but the two are cooperating. If it is proved that these people were paid the money, they are the ones who should pay it back and not the UK Government."
The envoy's revelation is a blow to the hopes of Tanzanians, including President Jakaya Kikwete, who had indicated that the Government would press for the return to the money paid out in the inflated commission.
Speaking in early 2007, President Kikwete said his Government was following with keen interest the investigations into the fraudulent radar purchase deal and would ask the UK to refund an equivalent of Sh15 billion.
"We are especially interested in two areas. One, we would like to know who was involved in the shady deal. But once this is confirmed we will lodge a formal request for compensation," the President said in response to questions at a meeting he held with senior newspaper editors at State House, Dar es Salaam.
A number of officials, including former Infrastructure minister Andrew Chenge, are being investigated for their alleged roles in the dubious deal.
Mr Chenge resigned following media reports that he was being investigated over the corrupt radar deal. In his spirited defence of himself, he caused a stir and became a talking point countrywide when he referred to $1 million reportedly found in his offshore account as "vijisenti" (pocket change).
The SFO is investigating the Sh50 billion deal involving a UK arms dealer, BAE Systems, which is alleged to have paid some middlemen a staggering $12 million (Sh15 billion).
Britain�s The Guardian newspaper reported last year that Mr Chenge had denied during its own investigations that the more than $1 million (�507,500) found in his offshore account had been paid to him by BAE.
Investigators involved in a three-year inquiry following the controversial deal to sell Tanzania a �28 million radar system traced the money to Jersey accounts reportedly held by Mr Chenge.
But he told the newspaper: "The obvious inference [of the investigation] is that I have received for my benefit 'corrupt payments' from BAE. This is untrue."
The former minister's American lawyer, Mr J. Lewis Madorsky, added: "While the matters in question took place a number of years ago, we can state ... that any and all allegations of illegality, impropriety, misconduct and unethical behaviour made against our client are categorically and vigorously denied".
According to The Guardian, the investigators had said that Mr Chenge could be a valuable witness. The target of their investigation was not him but BAE.
The arms company made the commission payments to a local agent in Tanzania to push through the �28 million radar sale, in an elaborate chain of offshore companies and a Swiss bank.
The SFO investigators also reportedly searched Mr Chenge�s residence in Dar es Salaam, in connection with the claims. He has not refuted the allegation.
According to media reports, a lengthy SFO investigation in the UK discovered that 31 per cent of the deal's contract price had been paid via Switzerland.
BAE Systems transferred the money to its subsidiary, Red Diamond Trading, which is registered in the British Virgin Islands.
Red Diamond then moved the cash to a Swiss account in the name of a Panama company, Envers Trading Corporation. This entity had two Panamanian nominee directors. But it was said to be secretly controlled by a Tanzanian middleman, Mr Shailesh Vithlani.
The SFO and PCCB investigators were checking whether Mr Vithlani passed on any of the money to Tanzanian politicians and officials.
According to President Kikwete, the UK investigation team had been given "all necessary support" by Tanzania's Directorate of Criminal Investigations.
The radar saga, which had earlier caused a storm in the UK House of Commons, took another turn after The Guardian reported that the SFO had confirmed to former British International Development minister Clare Short that it had seen documents showing that the �28 million sale of radar equipment to Tanzania by BAE Systems was corrupt.
Ms Short told a Tory-initiated debate in the House of Commons on the controversial 2002 sale that the issue had split the cabinet.
The newspaper further quoted Ms Short as describing the deal as "squalid", and calling for cross-party support to tighten the rules on arms sales to developing countries.
She also said the Tanzanian Government would have been happy had Britain blocked the deal by refusing to issue an export licence on the grounds that it would hinder the country's development.
During the debate, the report further notes, the current International Development Secretary, Mr Hilary Benn, revealed that as Ms Short's deputy at the time, he had also opposed the granting of the export licence. But he suggested that with hindsight the deal might have been worthwhile.
However, he said it would not be appropriate for him to comment on reports that a payment of $12 million (�6.1m) had been made to middlemen by BAE to clear the deal.
The United Kingdom will not compensate Tanzania for the loss incurred in the controversial 28 million sterling pounds (about Sh50 billion) radar purchase deal, its High Commissioner said yesterday.
Speaking in an exclusive interview with The Citizen in Dar es Salaam, the outgoing UK High Commissioner to Tanzania, Mr Phillip Parham, said though his country was aware that the price of the radar had been inflated, it would not entertain Tanzania�s plea for compensation.
Mr Parham, who is leaving next week after serving in Tanzania for three years, said the extra money was paid out as commission and bribes to the officers who were involved in the deal and "they are the ones who should repay the money."
He added: "Britain's Serious Fraud Office (SFO) is investigating the matter and the PCCB (Prevention and Combating of Corruption Bureau) is doing the same in Tanzania, but the two are cooperating. If it is proved that these people were paid the money, they are the ones who should pay it back and not the UK Government."
The envoy's revelation is a blow to the hopes of Tanzanians, including President Jakaya Kikwete, who had indicated that the Government would press for the return to the money paid out in the inflated commission.
Speaking in early 2007, President Kikwete said his Government was following with keen interest the investigations into the fraudulent radar purchase deal and would ask the UK to refund an equivalent of Sh15 billion.
"We are especially interested in two areas. One, we would like to know who was involved in the shady deal. But once this is confirmed we will lodge a formal request for compensation," the President said in response to questions at a meeting he held with senior newspaper editors at State House, Dar es Salaam.
A number of officials, including former Infrastructure minister Andrew Chenge, are being investigated for their alleged roles in the dubious deal.
Mr Chenge resigned following media reports that he was being investigated over the corrupt radar deal. In his spirited defence of himself, he caused a stir and became a talking point countrywide when he referred to $1 million reportedly found in his offshore account as "vijisenti" (pocket change).
The SFO is investigating the Sh50 billion deal involving a UK arms dealer, BAE Systems, which is alleged to have paid some middlemen a staggering $12 million (Sh15 billion).
Britain�s The Guardian newspaper reported last year that Mr Chenge had denied during its own investigations that the more than $1 million (�507,500) found in his offshore account had been paid to him by BAE.
Investigators involved in a three-year inquiry following the controversial deal to sell Tanzania a �28 million radar system traced the money to Jersey accounts reportedly held by Mr Chenge.
But he told the newspaper: "The obvious inference [of the investigation] is that I have received for my benefit 'corrupt payments' from BAE. This is untrue."
The former minister's American lawyer, Mr J. Lewis Madorsky, added: "While the matters in question took place a number of years ago, we can state ... that any and all allegations of illegality, impropriety, misconduct and unethical behaviour made against our client are categorically and vigorously denied".
According to The Guardian, the investigators had said that Mr Chenge could be a valuable witness. The target of their investigation was not him but BAE.
The arms company made the commission payments to a local agent in Tanzania to push through the �28 million radar sale, in an elaborate chain of offshore companies and a Swiss bank.
The SFO investigators also reportedly searched Mr Chenge�s residence in Dar es Salaam, in connection with the claims. He has not refuted the allegation.
According to media reports, a lengthy SFO investigation in the UK discovered that 31 per cent of the deal's contract price had been paid via Switzerland.
BAE Systems transferred the money to its subsidiary, Red Diamond Trading, which is registered in the British Virgin Islands.
Red Diamond then moved the cash to a Swiss account in the name of a Panama company, Envers Trading Corporation. This entity had two Panamanian nominee directors. But it was said to be secretly controlled by a Tanzanian middleman, Mr Shailesh Vithlani.
The SFO and PCCB investigators were checking whether Mr Vithlani passed on any of the money to Tanzanian politicians and officials.
According to President Kikwete, the UK investigation team had been given "all necessary support" by Tanzania's Directorate of Criminal Investigations.
The radar saga, which had earlier caused a storm in the UK House of Commons, took another turn after The Guardian reported that the SFO had confirmed to former British International Development minister Clare Short that it had seen documents showing that the �28 million sale of radar equipment to Tanzania by BAE Systems was corrupt.
Ms Short told a Tory-initiated debate in the House of Commons on the controversial 2002 sale that the issue had split the cabinet.
The newspaper further quoted Ms Short as describing the deal as "squalid", and calling for cross-party support to tighten the rules on arms sales to developing countries.
She also said the Tanzanian Government would have been happy had Britain blocked the deal by refusing to issue an export licence on the grounds that it would hinder the country's development.
During the debate, the report further notes, the current International Development Secretary, Mr Hilary Benn, revealed that as Ms Short's deputy at the time, he had also opposed the granting of the export licence. But he suggested that with hindsight the deal might have been worthwhile.
However, he said it would not be appropriate for him to comment on reports that a payment of $12 million (�6.1m) had been made to middlemen by BAE to clear the deal.
Tuesday, January 20, 2009
Barack Obama inauguration speach is hope for better world economy
Full text: Obama inauguration speech
Barack Obama has been sworn in as the 44th US president. Here is his inauguration speech in full.
My fellow citizens:
I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and co-operation he has shown throughout this transition.
Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.
So it has been. So it must be with this generation of Americans.
That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.
Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.
On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.
We remain a young nation, but in the words of scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.
In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labour, who have carried us up the long, rugged path towards prosperity and freedom.
For us, they packed up their few worldly possessions and travelled across oceans in search of a new life.
For us, they toiled in sweatshops and settled the West; endured the lash of the whip and ploughed the hard earth.
For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.
Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.
This is the journey we continue today. We remain the most prosperous, powerful nation on earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.
For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. All this we will do.
Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.
What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.
Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - that a nation cannot prosper long when it favours only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.
As for our common defence, we reject as false the choice between our safety and our ideals. Our founding fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and we are ready to lead once more.
Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.
We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the spectre of a warming planet. We will not apologize for our way of life, nor will we waver in its defence, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.
For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.
To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.
To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.
As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us, just as the fallen heroes who lie in Arlington whisper through the ages. We honour them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.
This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.
So let us mark this day with remembrance, of who we are and how far we have travelled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:
"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."
America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
Thank you. God bless you. And God bless the United States of America.
Barack Obama has been sworn in as the 44th US president. Here is his inauguration speech in full.
My fellow citizens:
I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and co-operation he has shown throughout this transition.
Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.
So it has been. So it must be with this generation of Americans.
That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.
Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.
On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.
We remain a young nation, but in the words of scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.
In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labour, who have carried us up the long, rugged path towards prosperity and freedom.
For us, they packed up their few worldly possessions and travelled across oceans in search of a new life.
For us, they toiled in sweatshops and settled the West; endured the lash of the whip and ploughed the hard earth.
For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.
Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.
This is the journey we continue today. We remain the most prosperous, powerful nation on earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.
For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. All this we will do.
Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.
What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.
Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - that a nation cannot prosper long when it favours only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.
As for our common defence, we reject as false the choice between our safety and our ideals. Our founding fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and we are ready to lead once more.
Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.
We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the spectre of a warming planet. We will not apologize for our way of life, nor will we waver in its defence, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.
For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.
To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.
To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.
As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us, just as the fallen heroes who lie in Arlington whisper through the ages. We honour them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.
This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.
So let us mark this day with remembrance, of who we are and how far we have travelled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:
"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."
America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
Thank you. God bless you. And God bless the United States of America.
Monday, January 19, 2009
Kilimanjaro starts weekly flower flights
Written by EABW CORRESPONDENT
Monday, 19 January 2009
DAR ES SALAAM, TANZANIA - The Tanzania Horticultural Association (TAHA) and its newly formed growers-owned logistics firm, TAHA Fresh Handling Limited (TFHL), have announced the successful inaugural flight of a Boeing 747-200 cargo aircraft from Kilimanjaro International Airport (KIA).
The US government through USAID was fundamental in focusing TAHA and the government of Tanzania on various initiatives into a reality.
Through the USAID support initiative, diverse stakeholders and industry professionals came together under the auspices of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) managed Tanzania Air Freight Programme (TAP).
In an interview with EABW recently, the Executive Director for TAHA, Jacqueline Mkindi said the flight took off on December 7, 2008 loaded with flowers, cuttings and vegetables from Tanzania to markets in Europe.
"This is the first of what will be a weekly service from JRO to Ostend in Belgium operated by MK Airlines. The second flight also took off in the night of Saturday December 13, 2008 uplifting almost 30 tonnes of horticultural produce," she said.
She said the route by MK cargo plane has a viable entry to Amsterdam and other destinations including USA, UK and Asia. "It's really competitive route, which starts from Belgium to South Africa en-route Entebbe and Kilimanjaro. Ostend in Belgium is a hub whereby cargo is lifted to other destinations," she said.
Mkindi said the development will facilitate growth of the horticulture industry but currently TAHA is making efforts to make sure the cargo plane lands at KIA three times a week.
"We are organizing ourselves to make sure the plane is coming at KIA three times a week because our growers still transport their flowers through Jomo Kenyatta International Airport (JKIA)," she said.According to Mkindi, the capacity of income generation of Kenya's horticultural is US$1.7 billion against Tanzania's earnings of US$140 million. Kenya outshines Tanzania in horticultural earnings since Kenya started the business a long time ago.
The outgoing US ambassador to Tanzania Mark Green; the USAID Mission Director, Robert Cunnane; the Vice President of the MK Airlines and other stakeholders held very constructive discussions with the growers and exporters of horticultural products at TAHA premises on December 11, 2008.
Ambassador Green pointed out that the access to reliable cargo space will create great vegetable and horticulture export opportunities for thousands of small and medium holder growers.
TAHA represents growers, exporters, processors and other service providers in the horticultural industry and seeks to promote the industry for its growth and sustainability.
Two years ago during its launching, Qatar Airways announced its eagerness to start a direct flight from the Kilimanjaro International Airport (KIA) to Doha specifically for transporting cut-flowers and passengers.
Monday, 19 January 2009
DAR ES SALAAM, TANZANIA - The Tanzania Horticultural Association (TAHA) and its newly formed growers-owned logistics firm, TAHA Fresh Handling Limited (TFHL), have announced the successful inaugural flight of a Boeing 747-200 cargo aircraft from Kilimanjaro International Airport (KIA).
The US government through USAID was fundamental in focusing TAHA and the government of Tanzania on various initiatives into a reality.
Through the USAID support initiative, diverse stakeholders and industry professionals came together under the auspices of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) managed Tanzania Air Freight Programme (TAP).
In an interview with EABW recently, the Executive Director for TAHA, Jacqueline Mkindi said the flight took off on December 7, 2008 loaded with flowers, cuttings and vegetables from Tanzania to markets in Europe.
"This is the first of what will be a weekly service from JRO to Ostend in Belgium operated by MK Airlines. The second flight also took off in the night of Saturday December 13, 2008 uplifting almost 30 tonnes of horticultural produce," she said.
She said the route by MK cargo plane has a viable entry to Amsterdam and other destinations including USA, UK and Asia. "It's really competitive route, which starts from Belgium to South Africa en-route Entebbe and Kilimanjaro. Ostend in Belgium is a hub whereby cargo is lifted to other destinations," she said.
Mkindi said the development will facilitate growth of the horticulture industry but currently TAHA is making efforts to make sure the cargo plane lands at KIA three times a week.
"We are organizing ourselves to make sure the plane is coming at KIA three times a week because our growers still transport their flowers through Jomo Kenyatta International Airport (JKIA)," she said.According to Mkindi, the capacity of income generation of Kenya's horticultural is US$1.7 billion against Tanzania's earnings of US$140 million. Kenya outshines Tanzania in horticultural earnings since Kenya started the business a long time ago.
The outgoing US ambassador to Tanzania Mark Green; the USAID Mission Director, Robert Cunnane; the Vice President of the MK Airlines and other stakeholders held very constructive discussions with the growers and exporters of horticultural products at TAHA premises on December 11, 2008.
Ambassador Green pointed out that the access to reliable cargo space will create great vegetable and horticulture export opportunities for thousands of small and medium holder growers.
TAHA represents growers, exporters, processors and other service providers in the horticultural industry and seeks to promote the industry for its growth and sustainability.
Two years ago during its launching, Qatar Airways announced its eagerness to start a direct flight from the Kilimanjaro International Airport (KIA) to Doha specifically for transporting cut-flowers and passengers.
Sunday, January 18, 2009
CAN TANZANIA SURVIVE WITHOUT AGRICULTURE?
Tanzania as a country that depends on agriculture as the main contributor to the Gross Domestic Product (GDP), and the main source of International trade, may need to rethink her economic future in the wake of 2008 oil crisis, in which a barrel of oil reached an historic high of $147 just to slide back to $36.2, a barrel in less than six months. Sending shockwave of fear to countries that relied on this commodity as their main source of economic vitality.
Oil producing countries such as Venezuela, and Iran just to name a few whose economies relies heavily on this single commodity, ripped massive profits and used their earnings not to diversify their economies, but to further their ideological beliefs. Both countries neglected their potential economic vulnerability based on oil dependence despite decades of huge profits. They are now not only in the same financial debacle, but also in potential social quandary of a different magnitude; they relied heavily on now devalued oil as their main source of economic lifeline.
Energy prices have tumbled across the board; with oil plummeting to its historical low of $36.2, a barrel at the New-York Mercantile Exchange (NYMEX) as of January 16th; A figure far below budget projections of $60 a barrel in the cases of Iran, and Venezuela. Countries whose leaders ascended to power, based on promises of ambitious, social programs transformation .The two countries must shelve some of their ambitious social projects for the time being, due to the impending budget deficits, and perhaps social problems, when some of the already existing services will have to be curtailed.
Oil accounts for more than 90% of Venezuela exports, while Iran depends on oil to account for 85% of the government’s revenues. Whilst this is the reality, Hugo Chavez of Venezuela, has used oil money to make thumb his nose towards the west; he has used the petrodollars to further his socialist and revolutionary causes of being a defender of the Latin America, against the American Empire Influence.
His Iranian counterpart Mohamoud Ahmadinejad, on the other hand, has used oil profits to wag his finger, and heralding his determination to wipe Israel off the map. Iran, spent millions of her petrodollars promoting itself as the sole defender of Islam across the Islamic world; She is fighting for hegemony on geopolitical and economic fronts across the Middle East. Not only that, Iran, has used her oil wealth to fend off the western efforts to block her nuclear drive, and this is still going on in the face of rising unemployment, and sky high inflation. The bottom line is that, both Iran and Venezuela failed to look at the broader picture, which is Iran, and Venezuela without oil.
Thanks to speculation in the financial markets, the countries racked-in massive profits, but then their leaders ignored the laws of economics, and called the $147 a barrel an insult. Iranian leader arrogantly suggested that, $200 a barrel would not be a fair price either. Even after the financial crisis started, they forgot that mere speculation was not sufficient to reverse Economic Law of Elasticity.
Gasoline being one of the modern day necessities, many believed it was not going to undergo a price shock ; the economic boom in India and China, and increasing demand in the United States, led many to perceive oil as insensitive to price changes (inelastic), because consumers would continue to demand it despite price increases.
Economic theories have disapproved those who were convinced that, oil prices would never fall. Prices have plunged sharply globally, except in Tanzania; one of the few countries where merchants can impose upon the people their own prices. Sadly enough, In the United States, some are currently paying equivalent of $.55cents a liter, whereby many paid roughly $1.50 a liter, less than six months ago.
In the face of economic hardship, characterized by the rise of unemployment, and declining earning power, oil become less of a necessity; need for food and shelter precedes the need for oil. However, availability of alternative forms of transportation, amount of income to spend on gasoline, and time factors have driven oil prices to their current low levels.
Just like Iran and Venezuela cannot breathe without oil, Tanzania has no economic vitality without agriculture. Agriculture accounts for 42.5% of the Gross Domestic Product (GDP) and more than 80% of the exports, and this puts our country in the same line of vulnerability, and insecurity as that of the oil producing countries which are now facing economic uncertainty because they did not properly plan for economic continuity without oil (reduced oil demand characterized by lower revenues).
An economy without agricultural dependence should be Tanzania’s motto. This ambition should take into consideration country’s massive wealth of natural resources. Just like Dubai, a tiny U.A.E country which solely relies on maritime and tourism for her survival, Tanzania should think 100 years from now by laying plans in place on how to exploit her massive wealth, such as the inexhaustible, and price insensitive Indian Ocean; making maritime services through port of Dar es salaam easily accessible, efficient and inexpensive for both domestic and to foreign customers such as Zambians, Congolese, Ugandans etc who are using Kenyan ports for the most part.
Massive advertisement campaign of our beaches as a focal point for attraction, for both domestic and foreign tourists would yield unprecedented positive results, just like it has in the cases of Mauritius and Morocco. Our historical wealth such as the famous Zanzibar, Bagamoyo and Mafia Islands are enough to shift the economic pendulum from agricultural dependence to a more balanced economy. Aggressive marketing of Mt. Kilimanjaro and other tourist attractions as parts of Tanzania and not Kenya, will definitely provide Tanzania with the missing link to full economic diversification.
Economists, financial experts, and scholars both in public and private sectors, should study the feasibility of balancing the economy from agricultural dependence to agricultural independence considering the country’s untapped wealth. In the face of climatic uncertainty of prolonged droughts, tsunamis, unfair agricultural subsidization by wealthy countries, Tanzania’s may find her competitive ability in the international commodity markets hampered by these factors. And possibly, chocking the economic lifeline out of the country.
There is no question, such ambitious move would be time consuming, expensive, complicated and very hard to accomplish. But in today’s dynamic and less predictable global economy, there is no other alternative. Tanzania MUST have economic diversification strategy. Massive wealth in the hands of a few could be channeled towards the feasible study of economic diversification for the good of the country’s majority riddled with poverty.
Tanzania, government must strengthen the country’s infrastructure, and use foreign resources in the form of investment to support the transformation. The law for attracting and protecting foreign investments must be enforced diligently, and foreign investors must be given assurances regarding the safety of their investments. Red tape and bureaucracy at government agencies MUST be ended.
The focus must be on the qualitative aspect of manpower by streamlining the government in such a way that quality becomes the highest priority, at the same time recognizing human talent and capability within the workforce. Rewarding employees to enable them release their full potential must be a common practice, and also retaining already developed talents to encourage innovation, which will in turn curb the current wave of brain drain.
With a young energetic population, Tanzania will enjoy an inexpensive labor force, should it adopt a broader industrialization project, which will reduce dependence on importation of unnecessary products, some of which are substandard and hazardous to the population. Domestic production of Industrial goods will translate into cheaper prices, as well as employment to the currently idle young population. These goods will not only be consumed domestically, but will also find demand in the Southern, Central, and East African economic blocs in which Tanzania’s influence is growing.
To fully diversify Tanzanian economy, the current government expenditure must be shifted to major development and construction projects to guarantee that in the future, the country’s infrastructure; will be able to sustain growth in all sectors of the economy, which will in turn shift the economic pendulum from agricultural dependence to agricultural independence.
We cannot wait until a crisis emerges for us to be able to start preparedness, the current economic and energy crisis are perhaps some of the best lessons we can learn in our generation. We do not want to go the Iranian or Venezuela routes. Now is the time to shove aside politics, rhetoric, and rattling, and think deeply on where the country is going to be hundred years from today.
The question is, can we see our country surviving without agriculture?
Mungu Ibariki Tanzania
John Mashaka,
Mashaka.john@yahoo.com
The Writer is a US based Banker, & Social Activist
Mashaka.john@yahoo.com
The Writer is a US based Banker, & Social Activist
Monday, January 12, 2009
Tanzanite price falls by 80 percent, WHY?
2009-01-11 14:08:47
By Adam Ihucha, Arusha
First it was cotton, then followed coffee, Nile Perch, tourism and this week tanzanite joined the list of the latest casualties of global economic meltdown, when the price of the rare gemstone plummeted by 79 percent at the global market.
The situation has prompted thousands of tanzanite miners as well as brokers to suspend production, pending the stability of the global market for the uniquely Tanzanian gemstone which generates about $500million (Sh575 billion) annually.
The government`s share of the earnings is about $20million in taxes and royalties, the big chunk of which is paid by local miners, while foreign investors continue to enjoy the huge tax exemption granted to them under the controversial Mining Act of 1998.
In Mererani, the owners of the nearly 200 tanzanite mining pits reportedly opted to suspend their operations between October 2008 and January 2009 rather than operate at a loss.
Closure of the mines will leave 45,000 tanzanite diggers and brokers jobless, according to statistics provided by the Manyara Regional Miners Association (MAREMIA).
But, surprisingly, the tanzanite sub-sector employs about 250,000 people in Jaypur India; where the unprocessed gemstone is cut and polished for re-export.
By the end of this week, in a small town popularly known as `Zaire village` - that used to shelter about 60,000 people - the number has fallen dramatically to only 20,000 residents, during the past few months, following the plummeting of tanzanite prices at the global market.
The situation fuelled also by the recent Thailand political unrest has almost brought the price of the rare tanzanite to its knees, after a lull of nearly six years. Thailand is one of the leading markets for tanzanite gem.
The major price falls comes at the time when the sector was already recovering from a major setback of the September 11 terrorist attacks in US, whereby it was claimed that the revenues generated from tanzanite was used to finance Al-Qaeda activities around the globe.
During that period, tanzanite price fell drastically, after a celebrity lawyer Ed Hayes` multi-billion dollar litigation lawsuit against tanzanite traders, who were alleged to be trading with Al-Qaeda fugitives.
After the announcement of the lawsuit, panicky traders in Thailand and India dropped the price to as low as $120 a carat for high quality pieces from November 2001 until the Tucson Tanzanite conference in spring 2002.
Miners puzzled, left at the crossroads
Leonard Shayo and Lemali Bayani have been prominent tanzanite dealers for several years, operating in Arusha city, but with the latest major price cut for the rare gems, they don`t know what the future holds for them.
According to them, a top colour gramme of raw tanzanite is currently trading at between Sh170,000 from the previous Sh800,000.
Local dealers told The Guardian on Sunday, that a single polished carat of Tanzanite top colour, currently trades at Sh180,000 down from Sh400,000 recorded in mid last year.
``The global credit crisis plus the unrest in Thailand have contributed greatly to the drastic price cut for tanzanite…we are puzzled.” Shayo told The Guardian on Sunday.
Following the `collapse of tanzanite market`, hundreds of tanzanite brokers, who used to flock to the famous Pangani Street at the heart of Arusha city, have vanished, casting a bleak future to the city whose major source of revenue tourism - is also said to be the latest victim of economic recession.
Back to Mererani, hundreds of small scale miners have downed their tools, pending the stability of the world`s market for tanzanite, according to MAREMIA Secretary Abubakari Mollel.
``It is a disaster as hundreds of our members suspend mining activities due to the collapse of the tanzanite market, `` Mollel told this reporter over the phone yesterday.
``Mining is the core business here, others such as hotels, lodges and retail shops are all dependent on it, now there is no more tanzanite and therefore people are leaving.`` chipped in Rajabu Abdallah, a resident of Zaire.
The once vibrant mining vicinity is slowly, but surely transforming into a ghost territory empty houses, deserted bus stations and relatively sad faces of the few remaining residents who have lost all hope of survival.
Discovered by one Ali Juwa Watu in 1967 at what is now known as Block `C` area in Mererani hills, about 70km South East of Arusha, tanzanite gems will clock 42 years next year.
Tanzanite gems were named by Tiffany as, ``the most important gemstone discovery in 2000 years``, and have lived up to expectations. It is now one of the most sought after gemstones in the world, especially in the US market.
Saturday, January 10, 2009
Africa has potential for more FDI inflows
2009-01-10 11:09:25
By A correspondent
Africa`s performance in attracting Foreign Direct Investments (FDIs) is exceptionally good due to availability of natural resources such as minerals, oil, gas and good promotional campaign efforts.
The recent Tanzania Investment Report shows that Africa has in place good investment and business environment.
Countries that have done well in attracting foreign investment include Algeria, Chad, Egypt, Equatorial Guinea, Nigeria and Sudan, which together accounted for 48 per cent. Over half of the FDI originated from the US, European Union, China, Malaysia and India.
Global flows of FDI have improved for the past three years in developing countries.
Asia and Oceania have continued to be the largest recipients of FDI as well as source of FDI among developing countries.
``The role of Foreign Private Investment (FPI) in the world economy is expanding, contributing significantly to the promotion of private sector investments, employment creation and economic growth.
FPI are also important in augmenting domestic investment capacity for production of goods and services in the economy and enhancing integration within an economy as well as competitiveness in the international trade,`` the Report says.
Given its importance in the financial globalization and the potential impact to the domestic economies, FPI tends to pose various challenges to individual recipient countries.
For instance, monitoring and evaluation of the inflows, maintaining macroeconomic stability, and undertaking institutional and policy reforms realise optimal benefits from the inflows.
These challenges oblige the developing countries to enhance capacity to compete in terms of attracting investments, gaining global market shares and improving social economic welfare.
Tanzania attracted FDI amounting to USD 330.6 million and USD 447.6 million of FPI, being an increase of 35.4 per cent. To ensure maximum benefit to the economy, Tanzania has been continually monitoring FPI using periodical surveys.
Tanzania has a greater potential to attract more FDI because of its continued political stability, promising prospects in the mining and petroleum sectors (gold, coal, oil and gas), tourism and agri-business, bio-fuel, sugar, cotton and agro-processing).
The EAC region received an annual average of USD 640 million of FDI. Tanzania received most of the FDI in the region.
Most of the FDI inflows went into the mining, manufacturing, wholesale and retail trade, finance and insurance.
Sunday, January 4, 2009
How global crisis will affect you in 2009
2009-01-04 11:42:59
By Staff Reporter
If you banked your hopes on the country`s top banker, believing that Tanzania is far away from the World`s powerful countries currently hit by financial crisis, and therefore can’t be affected, you were dead wrong.
The truth is that from the Chairman of a company at the upper echelons of society to those at the lowest rungs like coffee or cotton grower in a remote village, everyone will fall victim to the historic global financial turmoil which has caused economic recession ever witnessed since the great depression period.
As Tanzanians recover from the cheer of Christmas and New Year festivals, they will inescapably be hit by blows of the crisis during 2009 - described by President Kikwete in his end-of-the- year speech as `a tough year economically`.
To start with, the global economic recession will seriously hit tourism - a $1billion industry - with earlier predictions showing that revenue will decline by over 30 percent during this year.
In his end of the year speech, the President told the nation that in 2008, the global crisis reduced tourism earnings by 18percent.
Tourism is the country`s number one foreign exchange earner and one of the key indicators of the Gross Domestic Product(GDP), currently valued at $19billion.
With the credit crisis highly ruining US and Europe - the major source of tourists for Tanzania market-the year 2009 will be tough for the country`s tourism sector.
Another victim of the ongoing historic global financial turmoil will be the cotton sector which, during 2008, lost revenues by 54.4 per cent or Sh40.9billion.
The sector offers economic support to about 14million people in the Western Cotton Growing Areas, for whom the crisis will have an adverse impact.
Alarmed by the situation, President Kikwete this week said during his end of the year speech, ``by March last year a kilo of ginned cotton was $0.82cents but by the end of the year prices fell to $0.45cents…cotton traders told me how they have been highly affected by the ongoing crisis.``
The third casualty will be coffee, which last year suffered a 32 per cent loss due to global financial crisis.
Coffee exports earn the country around $90million per year.
By December last year, Arabica price fell by 34 per cent, reaching $104 for a 50kg bag, while Robusta price plummeted by 30 per cent, fetching $65.46 per bag.
On the trail is the Nile Perch industry which exports 80 per cent of its fish fillet to the European market, but due to the ongoing financial crisis, exports are projected to fall by 50 per cent.
This will be a thorn in the flesh to the already troubled sector which, in the past three years, has suffered heavily due to sharp dwindling of Nile Perch population in Lake Victoria and stiff competition from Vietnam.
Annually the Nile Perch industry exports fish fillet and related products valued at $200million, supporting 300,000 people directly and another 3million indirectly.
Currently, the only relieving aspect of the global economic crisis to Tanzanians is the plummeting fuel prices which by the end of last year reached $36per barrel of crude oil.
However according to the Economist magazine`s special edition of the World in 2009, fuel prices at the global market will surge to $75 by the end of this year.
However demand for oil in the rich world will fall in 2009 by around 1 per cent because of the ongoing global economic crisis.
Surprisingly, earlier projections by the Economic Intelligence Unit shows that food prices will drop by 25 per cent especially for maize, wheat and soybeans, while rice prices will also fall slightly by 19 per cent.
But millions of people according to the projections will still go hungry in developing countries during the year.
Summing up what need to be done, President Kikwete wants a special campaign to develop the domestic market which for so long time has not been effectively utilised by Tanzanians as well as the neighbouring countries.
For instance today, domestic tourism accounts for 40 per cent of all tourists who visit South Africa annually, while in US nearly half tourists are locals.
But, whether his free lecture to the Tanzania Tourism Marketing Board will this time be taken seriously by the concerned authority or not is a debatable issue.
In a country of 40million population, if at least 5 per cent of the population will visit various tourists’ attractions and spend an average of $100 annually, the sector will record $200million revenues generated from domestic tourism.
- SOURCE: Sunday Observer
Tuesday, December 23, 2008
FINANCIAL MARKETS: Nairobi Stock Exchange (NSE)
MARKET FACT FILE
CONTENTS
NSE’s Vision, Mission and Core Values
Fact Sheet
The Role of the Stock Exchange in the Economy
NSE Brief History
Listing requirement
A Chronology of Fiscal and Policy Incentives for the Capital Markets
Capital Raising activities in the market: IPOs and Rights Issue
Contact list of Member Firms
© NSE, BDD
Updated: Tuesday, November 11, 2008
THE NAIROBI STOCK EXCHANGE
Our vision
“To be a leading securities exchange in the world”
Our mission
“To provide a world class trading facility for wealth creation”
Our Core values
We believe in: -
i. People
ii. Integrity
iii. Professional Ethics
iv. Innovation
v. Confidentiality
vi. Fairness
vii. Excellence
© NSE, BDD
Updated: Tuesday, November 11, 2008
FACT SHEET
1. CONTACT ADDRESS Nation Centre, 1st Floor, Kimathi Street
P. O. Box 43633 - 00100, Nairobi, Kenya
Tel. +254 (020), 2831000
Fax. +254 (020) 2224200
E-Mail: info@nse.co.ke
Website; www.nse.co.ke
2. ESTABLISHED 1954
3. TRADING DAY/HOURS Monday to Friday 9.00 a.m. to 3.00 p.m.
4. NUMBER OF LISTED COMPANIES 59 (55 equities, 7 corporate bonds-3 of which have listed equities).
There are over 60
Government of Kenya treasury bonds listed on the fixed income
segment o f the securities exchange.
5. MARKET REGULATOR Capital Markets Authority of Kenya CMA (K). The Authority is
a government body mooted in 1989, under the Ministry of
Finance and through the Capital Markets
Authority Act Cap 485A (the CMA Act). The Authority was
established to regulate and oversee the orderly development
of Kenya’s capital markets
Rules and regulations available on the CMA Website:
www.cma.or.ke
6. INSTRUMENTS TRADED Equities, Preference shares, Treasury
Bonds & Corporate Bonds
7. INDEX NSE All Share Index (NASI) and NSE 20-Share Index
BASIS OF INDEX CALCULATION NASI is market capitalization weighted while NSE 20 Share
Index is geometric Mean of 20 Companies share prices.
8. DELIVERY & SETTLEMENT Done through Central Depository and Settlement Corporation
(CDSC)
9. BROKERAGE RATES
Costs to Investors - Transaction Levy Breakdown (% of the value of an Equity transaction)
0.12%
0.01%
0.12%
0.01%
NSE Transaction Levy
NSE Investor Compensation Fund
0.12%
0.01%
0.12%
0.01%
CMA Transaction Levy
CMA Investor Compensation Fund
0.06% 0.06% CDSC Transaction Levy
1.68% 1.78% Stockbroker Commission
2.00% 2.10%
Note: Although commissions are fully negotiable, industry practice is that the highest commission chargeable is 1.78%, applicable
to amounts upto Kshs. 100,000.00; above Kshs. 100,000.00, commissions are fully negotiable, subject to a maximum of 1.5%.
Stockbrokerage commission shall be limited to Kshs. 100 for odd lot transactions upto Kshs 3000 excluding statutory fees. Odd lot
transactions in excess of Kshs. 3000 shall be charged a commission at the prescribed rate of 1.8% excluding statutory fees.
Costs to Investors - Transaction Levy Breakdown (% of the value of Corporate and Treasury Bond transactions)
The only commission levied on Bonds is the Stockbrokerage commission: Minimum is Kshs. 500.00.
A 0.0625% commission of the value of the transaction is chargeable on amounts upto Kshs. 50.0 million. Commissions for amounts
above Kshs. 50.0 million are fully negotiable.
10. TAXES Withholding tax on dividend income is 5% for
Locals and 10% for non-residents
© NSE, BDD
Updated: Tuesday, November 11, 2008
Capital Gains Tax - Suspended since 1985
Withholding tax on interest income from listed corporate bonds and
Government of Kenya treasury bonds is 15%
12. FOREIGN INVESTMENT HOLDINGS 25.0% of the issued share capital of a listed company is reserved for
resident investors while the balance becomes a free float for all classes
of investors.
13. DETAILS OF REGISTRATION To be able to trade, equity securities should be deposited
with Central Depository and Settlement Corporation (CDSC); since
November 2004.
14. FOREIGN EXCHANGE CONTROLS All controls have been abolished.
15. RULES & REGULATIONS Available on the NSE website: www.nse.co.ke
THE BOARD OF DIRECTORS OF THE NSE
James Wangunyu - Chairman
Bob Karina
Edward Njoroge
David Njoroge
Esther Koimett
Edward Odundo
Lutaf Kassam
Stanley Ngaine
George A. Maina
Andre Desimone
Christopher Michael Mwebesa - Chief Executive
Lillian Mbindyo – Company Secretary
© NSE, BDD
Updated: Tuesday, November 11, 2008
The Role of the Stock Exchange in the Economy
The Stock Exchange is a market that deals in the
exchange of securities issued by publicly quoted
companies and the Government
The major role that the stock exchange has played, and
continues to play in many economies is that it promotes
a culture of thrift, or saving. The very fact that
institutions exist where savers can safely invest their
money and in addition earn a return, is an incentive to
people to consume less and save more.
Secondly, the stock exchange assists in the transfer of
savings to investment in productive enterprises as an
alternative to keeping the savings idle. It should be
appreciated that in as much as an economy can have
savings, the lack of established mechanisms for
channeling those savings into activities that create
wealth would lead to mis-allocation or waste of those
savings. Therefore, even if a culture of saving were to
be encouraged, the lack of developed financial markets
may lead to economic stagnation.
Thirdly, a robust stock market assists in the rational and
efficient allocation of capital, which is a scarce resource.
The fact that capital is scarce means systems have to
be developed where capital goes to the most deserving
user. An efficient stock market sector will have the
expertise, the institutions and the means to prioritise
access to capital by competing users so that an
economy manages to realise maximum output at least
cost. This is what economists refer to as the optimum
production level. If an economy does not have efficient
financial markets, there is always the risk that scarce
capital could be channeled to non-productive
investments as opposed to productive ones, leading to
wastage of resources and economic decline.
Fourthly, stock markets promote higher standards of
accounting, resource management and transparency in
the management of business. This is because financial
markets encourage the separation of owners of capital,
on the one hand, from managers of capital, on the
other. This separation is important because we
recognise that people who have the money may not
necessarily have the best business ideas, and people
with the best ideas may not have the money. And
because the two need each other, the stock exchange
becomes the all-important link. To give a practical
example, if an entrepreneur has a bright business idea
and lacks the money, he can approach the Nairobi
Stock Exchange, float shares and raise the capital he
needs to turn his idea into a business. The shareholders
will then appoint directors and management to run the
company on their behalf. This arrangement benefits
both parties because the manager of capital, who is the
entrepreneur, gets access to capital to turn his idea into
a reality, while the owners of capital, who are the
shareholders, get a return on their investment without
having to report for work at that company.
Fifthly, the stock exchange improves the access to
finance of different types of users by providing the
flexibility for customisation. This is made possible as the
financial sector allows the different users of capital to
raise capital in ways that are suited to meeting their
specific needs. For example, established companies can
raise short term finance through commercial paper;
small companies can raise long term capital by selling
shares; the Government and even municipal councils
can raise funds by floating various types of bonds as an
alternative to foreign borrowing.
Sixthly, and very important, is that the stock exchange
provides investors with an efficient mechanism to
liquidate their investments in securities. The very fact
that investors are certain of the possibility of selling out
what they hold, as and when they want, is a major
incentive for investment as it guarantees mobility of
capital in the purchase of assets.
There are many others less general benefits
which stock exchanges afford individuals,
corporations and even the Government.
1. The mobilization of savings for investment in
productive enterprises as an alternative to putting
savings in bank deposits, purchase of real estate
and outright consumption.
2. The growth of related financial services sector e.g.
insurance, pension and provident fund schemes
which nurture the spirit of savings.
3. The check against flight of capital which takes
place because of local inflation and currency
depreciation.
4. Encouragement of the divorcement of the owners
of capital from the managers of capital; a very
important process because owners may not
necessarily have the expertise to manage capital
investment efficiently.
5. Encouragement of higher standards of accounting,
resource management and public disclosure which
in turn affords greater efficiency in the process of
capital growth.
6. Facilitation of equity financing as opposed to debt
financing. Debt financing has been the undoing of
many enterprises in both developed and
developing countries especially in recessionary
periods.
7. Improvement of access to finance for new and
smaller companies. This is now possible on the
Alternative Investments Market Segment (AIMS).
This can also be realised through Venture Capital
institutions which are fast becoming key players in
financing small businesses.
8. Encouragement of public floatation of private
companies which in turn allows greater growth
and increase of the supply of assets available for
long-term investment.
The establishment of an efficient stock market is,
therefore, indispensable for any economy that is keen
on using scarce capital resources to achieve economic
growth.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
6
CHRONOLOGY OF EVENTS- NSE BRIEF HISTORY:
1920: In Kenya, dealing in shares and stocks started in
the 1920's when the country was still a British colony.
There was however no formal market, no rules and no
regulations to govern stock broking activities. Trading
took place on a gentleman's agreement in which
standard commissions were charged with clients being
obligated to honour their contractual commitments of
making good delivery, and settling relevant costs. At
that time, stock broking was a sideline business
conducted by accountants, auctioneers, estate agents
and lawyers who met to exchange prices over a cup of
coffee. Because these firms were engaged in other
areas of specialisation, the need for association did not
arise.
1951: An Estate Agent by the name of Francis
Drummond established the first professional stock
broking firm. He also approached the then Finance
Minister of Kenya, Sir Ernest Vasey and impressed upon
him the idea of setting up a stock exchange in East
Africa.
1953: The two approached London Stock Exchange
officials in July of 1953 and the London officials
accepted to recognize the setting up of the Nairobi
Stock Exchange as an overseas stock exchange.
1954: The Nairobi Stock Exchange was constituted as
a voluntary association of stockbrokers registered under
the Societies Act. Since Africans and Asians were not
permitted to trade in securities until after the
attainment of independence in 1963, the business of
dealing in shares was then confined to the resident
European community. At the dawn of independence,
stock market activity slumped due to uncertainty about
the future of independent Kenya.
1963: The first three years of independence, were
marked by steady economic growth, rekindling
confidence in the market. The exchange also handled a
number of highly oversubscribed public issues.
1972: Growth was however halted when the oil crisis
introduced inflationary pressures in the economy that
depressed share prices.
1975: A 35% Capital Gains Tax was introduced in
1975 (suspended since 1985), inflicting further losses to
the exchange which at the same time lost it's regional
character following nationalizations, exchange controls
and other inter-territorial restrictions introduced in
neighboring Tanzania and Uganda. For instance in
1976 Uganda compulsorily acquired a number of
companies, which were either quoted or subsidiaries of
companies quoted, on the Nairobi Stock Exchange.
1980: The Kenyan Government realized the need to
design and implement policy reforms to foster
sustainable economic development, and supported by
an efficient and stable financial system. In particular, it
set out to enhance the role of the private sector in the
economy, reduce the demands of public enterprises on
the exchequer, rationalize the operations of the public
enterprise sector, broaden the base of local ownership
and at the same time enhance capital markets
development.
1984: IFC/CBK study, "Development of Money and
Capital Markets in Kenya" became a blueprint for
structural reforms in the financial markets which
culminated in the formation of a regulatory body, 'The
Capital Markets Authority (CMA), in 1989. The overall
objective of the CMA is to assist in the creation of an
environment conducive for the growth and development
of the country's capital markets.
1988: The first privatization through the NSE is
the successful sale of a 20% government stake in
Kenya Commercial Bank. The sale leaves the
Government of Kenya and affiliated institutions
retaining 80% ownership of the bank.
1991: The NSE is registered under the Companies Act
and phases out the "Call Over" trading system in favour
of the floor based Open Outcry System.
1994: The NSE 20-Share Index recorded an all-record
high of 5030 points on Feb. 18, 1994. The NSE is rated
by the International Finance Corporation (IFC) as the
best performing market in the world with a return of
179% in dollar terms. An extensive modernization
exercise is undertaken, including a move to more
spacious premises at the Nation Centre in July 1994,
setting up a computerized delivery and settlement
system (DASS) and a modern Information Centre. For
the first time since the formation of the Nairobi Stock
Exchange, the number of stockbrokers increased with
the licensing of 8 new brokers.
1995: The Kenyan Government relaxed restrictions on
foreign ownership in locally controlled companies
subject to an aggregate limit of 20% with any single
holding not exceeding 2.5%. To help encourage foreign
portfolio investments these were doubled to 40% and
5% respectively in the June 1995 budget. The entire
Exchange Control Act was repealed in December 1995.
Seven more stockbrokers are licensed, bringing the
number to twenty from the original six (one of which
still survives) at the inception of the exchange in 1954.
Commission rates were reduced considerably from
2.5% to between 2% and 1 % on a sliding scale for
equities and 0.0625% for all fixed interest securities.
1996: The largest share issue in the history of NSE, the
privatization of Kenya Airways, comes to the market.
Having sold a 26% stake to KLM, the Government of
Kenya proceeded to offer 235,423,896 shares (51% of
the fully paid and issued shares of Kshs. 5.00 each) to
the public at Kshs. 11.25 per share. More than 110,000
shareholders acquired a stake in the airline and the
Government of Kenya reduced its stake from 74% to
23%. The Kenya Airways Privatization team was
awarded the World Bank Award for Excellence for 1996
for being a model success story in the divestiture of
state-owned enterprises.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
7
1998: The government expands the scope for foreign
investment by introducing incentives for capital markets
growth including the setting up of tax-free Venture
Capital Funds, removal of Capital Gains Tax on
insurance companies' investments, allowance of
beneficial ownership by foreigners in local stockbrokers
and fund managers and the envisaged licensing of
Dealing Firms to improve market liquidity.
1999: Kenya adopts the International Accounting
Standards (IAS) as the local Accounting Standards with
effect from January I, 1999.
2000
March 2000:
The African Lakes Corporation plc, a company
incorporated in Scotland and listed on the London Stock
Exchange, listed its shares on the Nairobi Stock
Exchange and raised £ 3.2 million gross of expenses.
African Lakes Corporation plc, is the majority
shareholder in African Online, then Africa’s largest
internet service provider.
1st August 2000: The NSE implements a new Trading
cycle, (T+5). The Central Depository System (CDS) Act
and the amended CMA Act (which covers Collective
Investment Schemes (CIS)) are passed by Parliament
and receive presidential assent, paving the way for the
full implementation of the CDS and for the introduction
of collective investment schemes in the Kenyan market.
5th September 2000: Following the signing of a
Partnership Agreement with the Association of National
Numbering Agencies (ANNA), the NSE was appointed as
the National Numbering Agency (NNA) for Kenya. The
NNA is responsible for issuing the ISIN for financial
securities issued under Kenyan jurisdiction in
accordance with the ISO 6166 guidelines issued by
ANNA.
October 2000: NSE becomes a member of the
Association of National Numbering Agencies (ANNA),
the global securities numbering agency.
November 2000: The Company for Habitat and
Housing in Africa, “Shelter-Afrique” issued the first
tranche of a medium term floating rate note worth
Kshs. 350.00 million. The net proceeds would be used
to fund the issuer’s investment in housing development
projects in Kenya. The issue would have a minimum
maturity of 18 months and a maximum maturity of 36
months. The coupon was linked to the 91-day Treasury
bill rate plus a 0.75% premium.
December 2000: Through its wholly owned
subsidiary, CFC Financial Services Ltd., CFC Bank
became the first licensed Securities Dealer on the
Nairobi Stock Exchange and was also licensed as an
investment advisor.
2001
March 2001:
African Lakes Corporation plc: On March 2, 2001,
African Lakes Corporation plc went to the market to
raise up to £8.4 million (net of expenses). Qualifying
shareholders were invited to subscribe for up to
34,903,956 new ordinary shares (29 pence per share)
or 4 new ordinary shares for every 11 existing ordinary
shares.
East African Breweries Ltd.: On March 27, 2001,
East African Breweries Ltd became the first company on
the Nairobi Stock Exchange to cross list on the Uganda
Securities Exchange (USE).
June 2001: Safaricom Ltd., Kenya’s first cellular phone
operator, offers medium term floating rate secured
notes with a 5 year maturity and worth Kshs. 4.0 billion.
The issue has a credit enhancement, provided by
Citibank, N.A., New York to cover upto 75% of the
amount of any unpaid scheduled payments of principal
and interest on the Notes. The coupon is linked to the
Government of Kenya 91-day Treasury bill rate plus a
1.00% premium.
July 2001: On July 11, 2001, the East African
Development Bank listed a Kshs. 2.0 billion, floating
rate, medium term note. The paper has a maturity of 5
years and a coupon rate linked to Government of Kenya
91-day Treasury bill rate plus a 0.75% premium.
November 14 2001:
Mumias Sugar Company
Following its privatization through a sale of government
shares to the public, Mumias Sugar Company lists on
the Nairobi Stock Exchange’s official list.
December 20 2001: 8 million additional shares of
ICDC Investment Company are admitted to the official
list of the NSE. ICDC Investment Company is Kenya’s
only listed Investment Company.
2002:
March 28, 2002
On March 28 2002, Kenya Airways became the second
company listed on the Nairobi Stock Exchange to cross
list its shares on the Uganda Securities Exchange (USE).
17 April 2002
The CMA announced the approval of the new NSE
trading and settlement rules. In summary, the amount
for block trades was revised upwards from Kshs. 3.0
million to between Kshs. 50.0 – 200.0 million. The block
trade rules now apply to trade values of above Kshs.
50.0 million but less than Kshs. 200.0 million. Lastly,
the brokerage commissions’ regime was liberalized.
1 May 2002
CFC Financial Services Limited is licensed as the first
non deposit taking Investment Bank. This was based on
its successful purchase of the entire share capital of an
existing licensed broker - Equity Stockbrokers Ltd., and
after its satisfactory performance as a dealer and its
compliance with the CMA requirements for licensing of
Investment Banks.
15 July 2002
As part of measures aimed at mobilizing domestic
savings through investment in financial assets, the CMA
gave approval to African Alliance Ltd. and Old Mutual
Ltd. to promote collective investment schemes (CIS) in
the form of unit trusts.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
8
15 July 2002
African Alliance Kenya was licensed as a non-deposit
taking Investment Bank on acquisition of a majority of
100% of an existing licensed broker – Kenya Wide
Securities Ltd.
26 July 2002
New Foreign Investor Regulations:
The foreign investor regulations are amended,
providing for a 25% minimum reserve of the issued
share capital for Kenyan citizens, while the balance of
the 75% becomes a free float for all classes of
investors. Within this 75% share holding available to all
classes of investor, there is no restriction on the amount
to be held by a single foreign investor. Additionally, the
following categories of investor have been defined:
Foreign institutional, Foreign individual, East African
institutional, East African individual, Local institutional,
Local individual (where East African is defined as a body
corporate registered in either Uganda or Tanzania or a
citizen of Uganda or Tanzania).
5 August 2002
The signing of the shareholders’ agreement for the
Central Depository and Settlement Corporation (CDSC).
The shareholders consisted of the Nairobi Stock
Exchange (20%), the Association of Kenya Stockbrokers
(18%), the CMA Investor Compensation Fund (7%),
and 9 institutional investors through the Capital Markets
Challenge Fund (50%); who collectively have invested
in the Central Depository and Settlement Corporation
(CDSC). The CDSC being the legal entity that owns and
runs the clearing, settlement, depository and registry
system for securities traded in Kenya’s capital markets.
23 October 2002
Mabati Rolling Mills Ltd. successfully completed the
launch of its first Kshs. 1.0 billion floating rate bond;
with a tenor of 5 years. The coupon was linked to the
Government of Kenya 91-day Treasury bill rate plus a
1.25% premium. The bond issue was part of the
ongoing financial restructuring of the firm.
31 October 2002
Mr. Goa Xiqing, Vice Chairman of the China Security
Regulatory Commission (CSRC) led a delegation from
the CRSC on the first such official visit by
representatives from the Chinese Capital Markets to the
NSE. Senior NSE officials including the then Chairman,
Ambassador Bethuel Kiplagat, Vice Chairman Mr.
William Murungu, and NSE Chief Executive Mr. Kibuga
Kariithi graced the occasion. In 2002, the Chinese
economy, for the first time supplanted the United
States, as the destination for the highest value of global
FDI flows.
22 November 2002
As of 22 November 2002, the NSE became the sole
NNA in Kenya, responsible for allocating the unique
code for quoted and unquoted securities domiciled in
Kenya.
2003
4 February 2003
The Directors of African Lakes Corporation plc (ALC)
resolved to cancel the company’s entire issued ordinary
share capital from the official list of the London Stock
Exchange and the Nairobi Stock Exchange. Thereafter
the shares would cease trading on the NSE’s main
investment market segment.
East African Packaging Ltd.
On February 14, 2003, Canadian Overseas Packaging
Industries Limited (COPIL) declared their intention to
takeover all the shares not held by themselves in East
African Packaging. At the time of the declaration, COPIL
owned 75% of all the issued shares in East African
Packaging Ltd.
After the takeover, EAPI applied for voluntary delisting
as provided in both the CMA Public Offers and Listing
Requirements and in the NSE Listing Manual.
24 March 2003
The Central Depository and Settlement Corporation in
collaboration with the NSE commenced the CDS
Education Campaign in preparation for the market
automation. The first CDS Education Workshop, with
the theme “The CDS Legal & Regulatory
Framework” kicked off. The objective of the workshop
was to update stakeholders on the CDS project and
clarify outstanding issues with key stakeholders.
27 March 2003
The NSE, together with professional speakers drawn
from the stock broking community, leading banks and
Investment Advisors, facilitated the seminar entitled
“Let Money Work for you”. The target audience for
the seminar was for leaders in the savings and credit
co-operative societies (SACCOS) sector with the
objective of illustrating the greater investment and
fundraising opportunities available through the NSE for
the growth and development of the sector. Kenya’s
sector is the most vibrant in Africa, with figures for
2003 as follows - USD. 1 billion, approximately 8% of
GDP, comprising over 3000 registered SACCOs, with a
membership estimated at close to 5 million.
December
For the year ending 31 December 2003, the exchange
recorded an equity turnover exceeding Kshs. 15.25
billion, more than the combined equity turnover
recorded in the previous 5 years; the number of shares
traded was 381.2 million. The bond market recorded a
turnover of Kshs 42 billion, a 24.85 % increase over the
previous year’s turnover of Kshs. 33.629 billion
2004
July
Kenya Commercial Bank (KCB) Rights Issue
On July 7 2004, the additional shares resulting from the
Kenya Commercial Bank (KCB) rights issue began to
trading on the Nairobi Stock Exchange. Kenya
Commercial Bank Rights issue (50 million shares –
through the issuance of 1 right for every 3 existing
shares) at a price of Kshs 49.00, were oversubscribed
by 12.25%. The bank raised Kshs 2.75 billion,
compared to Kshs 2.45 billion it intended to raise.
The Government of Kenya renounced its rights, diluting
its ownership from 35% to 25% (52,360,000 ordinary
shares) and at the same time enabling the Kenyan
taxpayer to own a piece of KCB using the capital
markets.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
9
Kenya Oil Company (KENOL) Rights Issue
KENOL shareholders approved the recommendation of
their Directors to split the 15,000,000 ordinary shares
of Kshs. 5 each in the proportion of Ten (10) shares for
every one held. Consequently, the number of shares
authorized became 150,000,000 ordinary shares of
Kshs. 0.50 each and the number of shares issued and
listed became 100, 796,120 ordinary shares of
Kshs.0.50 each in the capital of the company.
August
East African Development Bank
On August 9, 2004, the East Africa Development Bank
listed a Kshs. 800.0 million bond with a fixed interest
rate of 7.5% and a tenor of 7 years. Besides being the
only non Government of Kenya bond with a fixed
coupon, at the time of its listing, it had the longest
maturity of a non Government of Kenya bond listed on
the Exchange.
8 October 2004
Kenya Airways
Kenya Airways, with a primary listing on the Nairobi
Stock Exchange and a secondary listing on the Uganda
Securities Exchange, became the first company to have
a listing on all the three East African stock exchanges,
after listing its shares on the Dar-es-Salaam Stock
Exchange.
November
East African Breweries
29 November 2004 was the date of commencement in
trading of the new East African Breweries shares. This
was after the shareholders approved the increase in
authorised share capital, the bonus share issue (The
issued share capital of 109,829,772 ordinary shares of
Kshs. 10.00 each, increased by an additional
21,965,954 ordinary shares of Kshs. 10.00 each.) and
the share split at their annual general meeting held on
21 October 2004. The approvals resulted in the
increase of the share capital of the Company to Kshs.
2.0 billion and each ordinary share of Kshs. 10.00 being
subdivided into 5 ordinary shares of Kshs. 2.00 each.
Nairobi Stock Exchange Golden Jubilee
The NSE celebrated its 50-years of existence, and also
had the privilege of hosting the 8th ASEA conference. In
this celebration, the first NSE magazine dubbed “The
Exchange” and, The Central Depository & Settlement
Corporation (CDSC), which manages Central Depository
Systems, were both launched.
December
For the year ending 31 December 2004, the exchange
recorded an equity turnover exceeding Kshs. 22.32
billion; an increase of 46.37% over the corresponding
period for 2003. The number of shares traded was
625.3 million. The bond market recorded a turnover of
Kshs 34.1 billion, a 18.75 % decrease compared to the
previous year’s turnover. This was caused by a sharp
rise in short term interest rates in the third quarter of
2003 causing huge capital losses in the bond portfolios
of institutional investors.
2005
31 March 2005
On 31 March 2005 TPS Holdings Ltd. (TPSH),
announced that it had applied to the Capital Markets
Authority for approval of the proposed acquisition by
way of share exchange offer of up to 9,025,100
ordinary shares of Kshs. 5.00 each in Tourism
Promotion Services Limited (TPSL) not already owned
by TPS Holdings Ltd., (comprising 23.3% of the issued
shares of TPSL).
TPSH which already owned 76.7% of the issued shares
of TPSL, was in the process of consolidating its
ownership of TPS companies in Kenya, Tanzania and
Zanzibar, which implemented in full, would lead the
creation of an integrated hotels and tourism business
spanning the East African region.
If the share exchange were concluded and subject to
obtaining all the necessary statutory and regulatory
approvals, TPSH would acquire the remaining 23.3%
held by the public in TPSL. Subsequently, TPSH would
delist TPSL and list TPSH on the Nairobi Stock
Exchange.
April 2005
Faulu Kenya a microfinance institution, issues a Kshs.
500.0 million, 5 year floating rate note, with a margin of
0.5% above the most recent published average interest
rate for the Kenya Government 91 day Treasury bill.
Credit enhancement was provided by Agence Française
de Développement (AFD) for the tenor of the Issue, in
the form of a standby letter of credit covering 75% of
the aggregate of any unpaid principal and interest
(except default interest) due and payable under the
Notes (but subject to a limit of the Kenya Shilling
equivalent of 6.0 million euros. It is the first time that a
micro finance institution has come to the capital
markets to raise capital.
June 2005
On 29 June 2005, East African Breweries Ltd, with a
primary listing on the Nairobi Stock Exchange and a
secondary listing on the Uganda Securities Exchange,
became the second company to be cross listed on all
the three East African securities exchanges after listing
on the Dar-es-Salaam Stock Exchange.
July 2005
The Eastern and Southern African Trade and
Development (PTA) Bank, offered and listed medium
term floating rate notes with a 7 year maturity and
worth Kshs. 800.0 million.. The coupon was linked to
the Kenya Government 91-day Treasury bill rate plus a
1.00% premium.
Uchumi Supermarkets Rights Issue
The Uchumi Supermarkets rights issue which offered 2
new shares for every share owned on the record date
of 22 August 2005, was oversubscribed by 5.8%. The
minimum amount sort was Kshs. 850.0 million; with the
intended amount being set at Kshs. 1.2 billion. The
actual amount raised by the rights issue was Kshs.
1.269 billion.
The key shareholders of Uchumi – ICDCI, ICDC and
KWAL Holdings traded a majority of their rights through
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
10
the Stock Exchange. Their joint holding in Uchumi was
diluted from 51.5% to 23.6%, resulting in a more
distributed shareholding, and enabled Uchumi to shed
its parastatal status.
The above process can also be considered a partial
privatisation by the Government through the Nairobi
Stock Exchange and can be applied to other institutions
in which the Government has a significant shareholding
such as National Bank of Kenya (NBK), Kenya Power
and Lighting Company (KPLC), East African Portland
Cement (EAPC) and Housing Finance (HF).
Through a transparent and accountable process, the
Government accomplished two policy objectives -
facilitating the development of Kenya’s private sector
and concurrently raising revenues to fund its budget
deficit.
September 2005
The Kshs. 800.0 million Athi River Mining Company
(ARM) medium term note which would pay interest with
a margin of 1.75% above the most recent published
average interest rate for the 91 day Kenya Government
Treasury bills was listed on the Stock Exchange. It was
both the first credit rated and first unsecured corporate
bond in the Kenyan market. While it is not an
endorsement by the NSE to invest in the ARM bond, it
is an acknowledgment of the growing sophistication of
the Kenyan investor in terms of analyzing risk and
return. ARM was given an investment grade credit
rating of an A (long-term) and A1 (short-term) from the
Global Credit Ratings Company of South Africa.
December
BOC Kenya Ltd.
On December 1, 2005, BOC Kenya served a Notice of
Intention on the Directors of Carbacid Investment
Company, and other requisite parties in accordance
with Regulations 4 (1) and 4 (2) of the Capital Markets
(Takeovers & Mergers) Regulations 2002, informing
them of BOC Kenya’s intention to acquire effective
control of Carbacid. Both companies are incorporated in
Kenya and listed on the Nairobi Stock Exchange. BOC
Kenya made a conditional offer to all the shareholders
of Carbacid Investments Ltd., to acquire the entire
issued share capital of Carbacid (excluding 660,000
ordinary shares of Carbacid held by Kivuli Ltd., a wholly
owned subsidiary of BOC Kenya) comprising 10,666,755
ordinary shares of Kshs. 5.00 each.
Shelter Afrique
On December 2 2005, the Capital Markets Authority and
the Nairobi Stock Exchange approved the issue and
listing of the Kshs. 500.0 million unsecured
floating/fixed rate notes issued by The Company for
Habitat and Housing in Africa, “Shelter-Afrique”. The
notes have a maturity of 3 years. The first tranche (the
floating rate component, priced at a premium above the
most recent published average interest rate of the 91-
Day Government of Kenya treasury bill rate) of Kshs.
200.00 million is expected to be issued in January 2006,
whilst the second tranche of Kshs. 300.00 million,
expected in April 2006 will be issued at a fixed rate yet
to be determined.
Celtel Kenya Ltd.
On 14 December 2005, Celtel Ltd., Kenya’s second cell
phone operator, listed a Kshs. 4.5 billion, 4- year,
floating rate, medium term note.
The medium term noted, which will pay an interest
premium of 1.25% above the prevailing 91-day
treasury bill rate is 75% guaranteed by FMO, a
specialised financial institution, 51% owned by the
Dutch Government, and whose objective is to
contribute to the advancement of productive enterprise
in developing countries. The Guarantee which covers all
credit risks during the lifetime of the issue, including
political risks, is irrevocable and unconditional, and will
cover investors irrespective of the cause of the payment
default.
The medium term note will be used to fund capital
investment in the Celtel network; and general working
capital needs. It will result in the improvement of the
telecommunications network for Celtel Kenya’s over 1.6
million subscribers and overall, enhance the quality of
life of Kenyan citizens by facilitating their ability to
communicate with each other.
CFC Bank Ltd.
On 23 December 2005, CFC Bank officially listed 12.0
million new shares, arising out of its just successfully
completed rights issue. The rights issue increased the
authorised share capital of CFC Bank Ltd., to 156.0
million ordinary shares of Kshs. 5.00, all of which are
listed on the Stock Exchange. The rights issue was
necessitated by the fact that as financial services
become increasingly competitive and banks convert into
integrated financial services providers, Central Banks
across the world are urging banks under their
jurisdiction to comply with the impending Basel II
regime on capital allocation for risk weighed assets.
End Year Performance
For the year ending 31 December 2005, the exchange
recorded an equity turnover exceeding Kshs. 36.52
billion (a 63.61% increase over the previous year’s
performance of Kshs. 22.32 billion), the number of
shares traded was 874.199 million (a 39.80% increase
over the previous year’s performance of 625.33 million
shares. Bond market performance was disappointing;
recording a decline of 60.16% in the value of
transactions from Kshs. 34.11 billion recorded in 2004
to Kshs. 13.59 billion recorded for 2005.
March 2006
Introduction of the Shares of TPS Eastern
Africa
March 20 2006 marked the official introduction of the
89,865,587 ordinary shares of one shilling each of
TPS Eastern Africa (formerly TPS holdings Ltd.) and
familiarly known as Serena; the only publicly listed
holding company in East Africa’s tourism industry.
The introduction was necessitated by recent
developments such as the integration of the
Tanzanian hotels and lodges with the existing
operations of Tourism Promotion Services Ltd. in
Kenya. TPS Eastern Africa (Serena) has indicated that
the future development of the business includes the
integration of the other Serena Group properties in
Uganda and Mozambique and the cross listing of the
shares of TPS Eastern Africa on the Dar-es-Salaam
Stock Exchange and the Uganda Securities Exchange.
May 2006
KenGen Initial Public Offering
On May 17, 2006, the shares of Kenya Electricity
Generating Company (KenGen) began to trade on the
Exchange. The privatization of the generator of 80
per cent of Kenya’s electricity was 337 per cent
oversubscribed. The Government of Kenya therefore
easily met its target of raising Kshs. 7.8 billion (USD.
102.9 million) from the market for the 30 per cent of
the shares of KenGen that it offered to the public.
The above process can also be considered a partial
privatisation by the Government through the Nairobi
Stock Exchange and can be applied to other
institutions in which the Government has a significant
shareholding such as National Bank of Kenya (NBK),
Kenya Power and Lighting Company (KPLC), East
African Portland Cement (EAPC) and Housing Finance
(HF).
Through a transparent and accountable process, the
Government accomplished two policy objectives -
facilitating the development of Kenya’s private sector
and concurrently raising revenues to fund its budget
deficit.
June 2006
Suspension of the Listing and Trading of the
Shares of Uchumi Supermarkets
On 1 June 2006, following the receipt of a resolution
of the Board of Directors of Uchumi Supermarkets
dated 31 May 2006 indicating that the company was
insolvent, the Capital Markets Authority, in pursuant
to powers granted by section 11 (3) (L) of the Capital
Markets Act (as amended by the Capital Markets
Authority Act 2000), and pursuant to the
requirements of section 22 of the Capital Markets
Securities (Public Offers, Listing and Disclosures)
Regulations 2002, suspended the listing and trading
of the shares of Uchumi Supermarkets at the Stock
Exchange.
August 2006
Introduction of the Shares of Equity Bank
August 7 2006 marked the occasion of the official
introduction of the shares of Equity Bank on the
official list of the main investment segment of the
NSE. At the time of listing, Equity Bank, whose main
business is the provision of retail banking and
microfinance services was already a public company
83.55 per cent owned by over 2,416 indigenous
shareholders, 10.93 per cent by Britak Investment
Company Limited and 5.52 per cent by Africap
Microfinance Fund Ltd., (a consortium of international
development investors principally the International
Finance Corporation (IFC) and the European
Investment Bank).
The listing highlights one of the main functions of a
securities exchange, which is to provide a trading
platform to facilitate the efficient and transparent
transfer of financial securities, thereby reducing the
risk to the investor of holding the asset and at the
same time, through the principle of supply and
demand, providing an indicative value of the security.
August 29 2006
The Official Listing of the Entire Issued Share
Capital of Scangroup
The official listing of the entire issued share capital of
Scangroup comprising 159.0 million issued and fully
paid ordinary shares ocurred. Scangroup, which is a
holding company for Media Initiative East Africa,
Lowe Scanad (Kenya, Uganda and Tanzania),
Thompson Kenya, McCann Kenya, Grey East Africa,
Draft Worldwide East Africa, Scanad PR and Universal
McCann East Africa, made history by being the first
media and advertising firm to list in East Africa.
This followed the successful offer to the public to
subscribe to 9.0 million new shares and the sale of
60.0 million existing shares by the vendor – Mr.
Bharat Thakrar; also to the public at Kshs. 10.45 per
share. The allocation results of the offer of 69.0
million ordinary shares of Scangroup released on
August 23, 2006, indicated that the public offer
attracted 96,459 valid applications for a total number
of 428,386,000 ordinary shares; Kshs. 4.48 billion
was received; an oversubscription of Kshs. 3.8 billion
equivalent to 6.21 times the Initial Public Offer (IPO)
amount of Kshs. 721.0 million. Post IPO, the key
employees of the company held 11.5% of the
company and Mr. Thakrar remained the largest
shareholder retaining 28.5% of the issued shares in
the listed company.
On the first day of trading, the share traded at a low
of Kshs. 12.00, reached a high of Kshs. 20.00 and
closed the trading session at an average trading price
of Kshs. 15.00.
September 2006
Commencement of Automated Trading
Monday 11 September 2006 saw the implementation
of live trading on the automated trading systems of
the Nairobi Stock Exchange.
The ATS is sourced from Millennium Information
Technologies (MIT) of Colombo, Sri Lanka, who are
also the suppliers of the Central Depository System
(CDS). MIT have also supplied similar solutions to the
Colombo Stock Exchange and the Stock Exchange of
Mauritius.
To ensure that there were no significant departures
from the overall trading principles in our market the
NSE ATS solution was customised to uphold the spirit
of the Open Outcry Trading Rules in an automated
environment.
Trading hours also increased from two (10:00 am –
12:00 pm) to three hours (10:00 am – 1:00 pm).
Other innovations included the removal of the block
trades board and introduction of the functionality for
the trading of rights in the same manner as equities.
Besides trading equities, the ATS is also fully capable
of trading immobilised corporate bonds and treasury
bonds.
The anticipated benefits of the new system include
greater transparency in the placement of bids and
offers. The system will also improve market
surveillance and transmit almost in real time, trading
information relating to index movements and price
and volume movements of traded securities. More
current information will become readily available to a
wider constituency of our stakeholders, facilitating
the decision making process and lowering the risk of
participating in our markets. As such the Exchange
views a situation where it will soon have an
opportunity to enhance its revenue streams through
information vending to our stakeholders.
November 27 2006: Singning of MoU between
the Nairobi Stock Exchange and Uganda
Securities Exchange on mass cross listing
The MoU will allow listed companies in both
exchanges to dualist. This will facilitate growth and
development of the regional securities markets.
Some of NSE’s listed companies that have dual- listed
include: Kenya Airways, East Africa Breweries and
Jubilee Holdings. Benefits that accrue to cross listed
companies include:
• Access to a wider capital base across the
region;
• A regional presence, resulting in a wider
acceptance and recognition of the
company brand across the region by
company stakeholder- shareholders,
employees, customers and regulators
• The prestige of a regional listing.
December 18th 2006: Listing of Eveready East
Africa (IPO)
Eveready, regional battery maker offered 63 million
shares to the public at an IPO price of Kshs 9.50 per
share. This issue raised Kshs 556.8 million.
December 24th 2006: CSR- NSE Christmas Tree
Fund
As part of NSE’s Corporate Social Responsility, NSE
launched a Christmas Tree Fund on December 24th
2006 to raise funds to help the most unfortunate in
our society. Contributors to this kitty include
members of NSE, listed company and friends to NSE
January 29th 2007: Additional listing of 92 m
Mumias shares
Offer for sale of 91,999,220 shares in mumias for the
Government of Kenya commenced trading on this
date. Following this offer, the government of Kenya
shareholding reduced by 18% to 20% (from 34%) in
Mumias sugar company. Through this issue, the
government raised Kshs 4.5 billion.
February 16 2007: Re-launch of NSE Website
NSE upgraded its website to enhance easy and faster
access of accurate, factual and timely trading
information. Also the upgraded website will be used
to boost data vending business. The Minister of
Finance, Hon. Amos Kimunya officiated the
ceremony.
June 4 2007: Listing of Access Kenya Group
199,885,578 shares of Access Kenya Group Ltd were
listed. A total of Kshs 800 million was raised from this
IPO.
July 20, 2007: NSE reviews Index
NSE revewed THE Index and announced the folwing
companies that constitute the NSE Share Index.
1. ICDC Investment Company
2. Kenya Electricity Generating Company
3. Mumias Sugar Company
4. Rea Vipingo Plantations Ltd.
5. CMC Holdings
6. Express Ltd.
7. Nation Media Group
8. Sasini Ltd.
9. Kenya Airways
10. TPS Eastern Africa
11. Barclays Bank (K) Ltd.
12. Diamond Trust Bank (K) Ltd.
13. Kenya Commercial Bank
14. Standard Chartered Bank (K) Ltd..
15. Bamburi Cement Ltd.
16. British American Tobacco Ltd
17. East African Breweries Ltd.
18. Sameer Africa
19. Kenya Power & Lighting Company
20. Total (K) Ltd.
The review of the NSE 20-share index is aimed at
ensuring it is a true barometer of the market. The
20-share index was last reviewed on 19 May 2003
when NIC replaced East African Packaging
27th August 2007: listing of Kenya Re’
600 million shares of Kenya Re’ were officially listed.
The offer was oversubscribed by 405%.
18th October 2007: RENAISSANCE CAPITAL
Joins NSE as a member. It took over the seat of
Francis Thuo (which was under receivership).
December 14th 2007, NSE ceased Centralized floor
based trading.
December 17th 2007, NSE officially implements
Wide Area Network (WAN) - remote trading plat
form. In this system, brokers and investment banks
trade through terminals in their offices linked to NSE
trading engine. The implementation of WAN is
envisaged to boost NSE’s efficiency and engance
volumes, as trading hours were extended from 9.00
a.m to 3.00 pm, in every trading day.
June 26 2008,
CHANGES TO THE NSE 20 SHARE INDEX AND ALL
SHARES INDEX (NASI)
NASI (All Share Index)
1. Safaricom Limited has been included
Though the regulations governing the NSE 20 Share Index
require a company to have been trading for a minimum of
one year prior to inclusion in the index, the Board of
Directors of the Nairobi Stock Exchange (NSE) have made
an exception for Safaricom Limited. This is in light of the
significant impact it has occasioned on market capitalisation
and trading activity at the bourse. Mr. Mbaru says,
“Safaricom Limited’s inclusion will enhance the technical and
market reflection accuracy of the NSE 20 Share Index.”
All the above changes have been endorsed by the NSE
Board after due regard was paid to factors of market
capitalisation, turnover, shares traded and the liquidity of
the respective counters. Further, the changes pay heed to
ensuring a fair sectoral representation.
February 25th 2006, NSE introduces NSE ALL Share
Index (NASI). The NASI is a comprehensive and
complementary index designed to represent
investors’ expectations of the future performance of
all listed companies. NASI’s calculation is based on
market capitalization, implying that the index level
will reflect the total market value of the constituent
stocks. The base year for NASI 01ST January
2008=100.
April 16 2008, NSE launched NSE Smart Youth
Investment Challenge to promote stock market
investments among Kenyan Youths. NSE partnered
with Smart Youth Investment Ltd. (SYI) and it was a
key sponsor, contributing Kshs 1.0 million.
The objective of the challenge is (i) Edutainment –
education and entertainment”, to occupy the minds
of the youth positively and draw them away from the
negative energy created by the current political,
economic and social situation in the country; (ii)
encourage the culture of thrift and saving funds
amongst the university students; (iii) encourage the
youth to invest their savings in the capital markets.
June 9 2008 – official listing of Safaricom Ltd,
A total of 50 billion shares were listed. The
Government of Kenya sold to the public 25 %( 10
billion shares) of it shareholding to the public at a
price of Kshs 5.00 each. Through this IPO, the
government realized Kshs 50 billion. The IPO was
oversubscribed by 532% attracting Sh286 billion
from local and foreign investors.
June 26 2008,
CHANGES TO THE NSE 20 SHARE INDEX AND
ALL SHARES INDEX (NASI)
The Chairman of the Nairobi Stock Exchange (NSE),
Jimnah Mbaru, together with the Board of Directors,
in line with international best practice and the
quarterly review of the Exchange’s indices (NSE 20
share and NASI), is implementing the following
changes, effective 1st July 2008.
NSE 20 SHARE INDEX
1. Equity Bank replaces Diamond Trust
Bank in the Finance and Investment Sector
2. East African Cables replaces Sameer
Limited and Athi River Mining replaces
Total Kenya in the Industrial and Allied
Sector
3. Safaricom Limited has replaced TPS
Serena in the Commercial and Services
Sector
ANNEXE 1: NSE MARKET SEGMENTS
NSE has the following Three market Segments
1. Main Investments Market Segment (MIMS)
2. Alternative Investments Market Segment (AIMS)
3. Fixed Income Securities Market Segment (FISMS)
Listing Requirements:
1. MAIN INVESTMENTS MARKET SEGMENT (MIMS)
The Minimum Eligibility Conditions and Listing Requirements for the Main Investment Market Segment
(MIMS) are:
1. Company to be listed must be a company limited by shares and registered under the Companies Act (Cap 486) as a
public limited company.
2. Company must have a minimum authorized, issued and fully paid up share capital of Kshs 50 million and net assets of
Kshs 100 million before the public offering of shares.
3. Shares to be listed must be freely transferable and not subject to any restrictions on marketability or pre-emptive
rights.
4. Company must have published audited and financial statements (complying with international accounting standards) for
an accounting period ending on a date not more than 3 months prior to the proposed date of the offer.
5. If more than 3 months will have elapsed since the end of the company's last accounting period for which audited
financial statements have been prepared and the proposed offer date, then the company must prepare a set of unaudited
interim financial statements for the period following the end of the financial period.
6. The un-audited interim financial statements should not however exceed 6 months, unless the issuer is already listed in
any market segment. In this regard unlisted issuers who have published accounts exceeding a period of 6 months will
have to carry out an interim audit for the period, or plan the date of offer to immediately follow the completion of the
next annual audit.
7. Company must have prepared financial statements for the latest accounting period on a going concern basis and
audited report must not contain any emphasis of matter or qualification in this regard.
8. At the date of application, the company must not be in breach of any of its loan covenants particularly in regard to the
maximum debt capacity.
9. As at the date of the application and for a period of at least 2 years prior to the date of the application, Directors of the
issuer must not have:
any petition under bankruptcy laws filed against him/her (for individuals), or any winding-up petition pending or
threatened against it (for body corporate);
any criminal proceedings in which he/she was convicted of fraud or any criminal offence, nor be named subject of
pending criminal proceeding against him/her (for individuals), or any offence or action either within or outside Kenya
(for body corporate);
been the subject of any ruling of a court of competent jurisdiction or any governmental body, that permanently or
temporarily prohibits him or her from acting as an investment adviser or as a director or employee or a broker or
dealer, director or employee of any financial institution or engaging in any type of business practice or activity.
10. Company to be listed must have declared positive profits after tax attributable to shareholders in at least three of the
last. five completed accounting periods to the date of the offer.
11. Companies wishing to be listed should be solvent and the auditors report must be unqualified.
15
2. ALTERNATIVE INVESTMENTS MARKET SEGMENT (AIMS)
The Minimum Eligibility Conditions and Listing Requirements for the Alternative Investment Market
Segment (AIMS) are:
1. Company seeking listing must be incorporated or registered as a public limited company under the Companies Act
(Cap 486).
2. Company to be listed must also be a company limited by shares.
3. Company must have a minimum authorized, issued and fully paid up shares of Kshs 20 million and net assets of Kshs
20 million before seeking listing.
4. The shares to be listed must be freely transferable and not subject to any restriction on their marketability or preemptive
rights.
5. At the date of application, the company must not be in breach of any of its loan covenants particularly in regard to
the maximum debt capacity.
6. As at the date of the application and for a period of at least 2 years prior to the date of the application, Directors of
the issuer must not have:
any petition under bankruptcy laws filed against him/her (for individuals), or any winding-up petition pending or
threatened against it (for body corporate);
any criminal proceedings in which he/she was convicted of fraud or any criminal offence, nor be named subject of
pending criminal proceeding against him/her (for individuals), or any offence or action either within or outside Kenya
(for body corporate);
been the subject of any ruling of a court of competent jurisdiction or any governmental body, that permanently or
temporarily prohibits him or her from acting as an investment adviser or as a director or employee or a broker or
dealer, director or employee of any financial institution or engaging in any type of business practice or activity.
7. Company shall not be eligible to list unless:
(i) It has a minimum of 25 investors;
(ii) At least 20% of the paid up capital after listing, excluding any holding by the employees or family
members, is held by not less than the prescribed minimum number of investors; and
(iii) No investor shall hold more than 3% of the shares in (ii) above.
8. Company must have been in existence in the same line of business for a minimum of 2 years with good growth
potential in order to provide a comparative and reliable track record.
9. A subsidiary whose parent company has a five year track record may list, provided that the subsidiary has an
operating track record of at least one year.
10. The accounts of the company must not be older than 4 months before the listing and must be audited.
11. Company must be solvent and the auditors report must be unqualified.
12. Company must have suitably qualified senior management with relevant experience, for at least one year prior to the
application for listing, none of whom shall have committed any serious offence that may be considered inappropriate
for the management of a listed company.
13. Company may not use the proceeds of a public issue to redeem any loans by the directors or the shareholders prior
to the listing.
14. Company must ensure that the existing shareholders, related persons or such other group of controlling shareholders
who have influence over management, undertake not to sell their shareholding, before the expiry of a period of 24
months following listing.
15. Company must have at least two non-executive and independent directors on its board of directors.
16. Company must disclose a clear policy on dividends.
17. Company listed on AIMS may only change from this segment after a minimum of one year and on satisfying, the
requirements for Main Investments Market Segment.
18. All companies seeking listing in MIMS shall have their information memoranda or prospectuses approved by the
Capital Markets Authority.
16
3. FIXED INCOME SECURITIES MARKET SEGMENT (FISMS)
Eligibility conditions and listing requirements for Fixed Income Securities Market Segment (FISMS)
Companies intending to list their commercial papers or corporate bonds in the Fixed Income Securities Market Segment
must satisfy the following eligibility requirements:
1. Company to be listed must be a company limited by shares and registered under the Companies Act
(Cap 486).
2. The company must have a minimum authorized, issued and fully paid up share capital of Kshs 50 million and net
assets of Kshs 100 million before the public offering of the securities. In the event that the issuer does not have net
assets of Kshs 100 million, the issuer must obtain from a bank or any other approved institution a financial
Guarantee to support the issue.
3. The securities to be listed must be freely transferable and not subject to any restrictions on marketability or preemption
rights.
4. The company must have published audited financial statements complying with International Accounting Standards
for an accounting period ending on a date not more than 3 months prior to the proposed date of the offer.
5. If more than 3 months will have elapsed since the end of the company's last accounting period for which audited
financial statements have been prepared and the proposed offer date, then the company must prepare a set of
unaudited interim financial statements for the period following the end of the financial period
6. The unaudited interim financial statements should not however exceed 6 months, unless the issuer is already listed
in any market segment. In this regard, unlisted issuers with published accounts exceeding a period of 6 months will
have to carry out an interim audit for the period, or plan the date of offer to immediately follow completion of the
next annual audit.
7. The company must have prepared financial statements for the latest accounting period on a going concern basis and
audit report must not contain any emphasis of matter or qualification in this regard
8. At the date of the application, the company must not be in breach of any of its loan covenants particularly in regard
to the maximum debt capacity
9. The company should have made profits in at least two of the last three years preceding the issue of the commercial
paper or the corporate bond.
10. Companies wishing to issue or list debt securities should not be insolvent.
11. Total indebtedness of the issuer, including the new issue of the commercial paper or the corporate bond shall not
exceed 400% of the company's net worth (or a gearing ratio of 4: 1) as at the date of the latest balance sheet.
12. The ratio of funds generated from operations to total debt for the three trading periods preceding the issue shall be
maintained at a weighted average of 40% or more. These requirements of solvency and adequacy of working
capital will apply both to the issuer on its own and to the group.
13. The conditions as provided in paragraphs 12 and 13 must be maintained as long as the commercial paper or
corporate bond remains outstanding.
14. The directors and senior management of an applicant must have collectively appropriate expertise and experience
for the management of the groups business. Details of such expertise must be disclosed in the issue information
memorandum.
15. The applicant must ensure that each director is free of any conflict of interest between the duties he/she owes to the
company and his/her private interest
16. If the issuer is a banking or an insurance company, the company must obtain a clean certificate from the relevant
regulatory authority.
17. Where there is a guarantor and in the event that the guarantor is a bank or an insurance company licensed to
operate in Kenya, the consent [except where the guarantor is an offshore bank or insurance company not subject to
regulation of the CBK or Commissioner of Insurance] of the CBK or the Commissioner of Insurance as the case may
be, will be required.
18. Where there is a guarantor, he will provide the Capital Markets Authority with a financial capability statement dully
certified by its auditors.
19. Where there is a guarantor, he will provide the CMA with a financial capability statement dully certified by its
auditors.
20. Companies seeking listing in MIMS shall have their information memoranda or prospectuses approved by the Capital
Markets Authority.
17
POLICY AND TAX INCENTIVES FOR THE CAPITAL MARKETS
• The legal costs and other incidental costs
relating to the introduction of shares (when
a company lists its share without raising
capital) is corporate tax deductible. (2006)
• Interest income generated from the cash
flows passed to the investors who buy listed
bonds as asset backed securities for the
purposes of developing the infrastructure,
has been exempted from both withholding
and income tax (2006)
• Interest income accruing to all listed bonds
used to raise funds for infrastructure and
social services, which have a maturity of at
least three years, is exempt from withholding
and income tax (2006)
• As an incentive to encourage more investors
at the Nairobi Stock Exchange, the Minister
proposed that newly listed companies pay
corporation tax at a lower rate of 20%, for a
period of 5 years, provided these companies
offer at least 40% of their shares to the
Kenyan public (2005)
• Securitization based on bankable assets and
ability to generate cash has become a viable
alternative in most emerging markets,
particularly for institutions providing
infrastructural services to raise long term
capital. In this regard, the Minister proposed
to exempt investment income of Special
Purpose Vehicles (SPVs) from income tax.
This is to encourage institutions providing
infrastructural services to set up SPVs for
purposes of issuing asset backed securities.
(2005)
• Foreign investors can now acquire shares
freely in the stock market subject to a
minimum reserved ratio of 25% for domestic
investors in each listed company. (2002)
• Investment ceiling by retirement benefits
schemes in fixed income securities (e.g.
bonds and commercial papers) has been
raised from 15% to 30%. (2002)
• To encourage savings, collective investment
schemes set up by employers on behalf of
employees to invest in listed shares, will be
exempted from income tax. (2002)
• Effective 1 January 2003, newly listed
companies are to pay a lower corporation
tax of 25% (i.e. 5 percentage points lower
than the standard corporation tax of 30%)
for a period of 5 years following their listing.
The new legislation applies to companies
with who float at least 30% of their issued
share capital to the public. (2002)
• New and expanded share capital by listed
companies or those seeking listing exempt
from stamp duty (2000/2001)
• Transfers of assets involved in the issuance
of asset-backed securities will to be exempt
from stamp duty (2000/2001)
• Newly listed companies to be taxed at a
lower rate of 27% as compared to the
standard rate of 30% for a period of three
years following the date of listing. This is
also dependent on such companies offering
at least 20% of the share capital to the
public (2001)
• Companies that apply and are listed shall get
a tax amnesty on their past omitted income,
provided they make a full disclosure of their
assets and liabilities and undertake to pay all
their future due taxes (2001)
• Income accruing to registered collective
investment schemes tax-free (1999)
• Licensed dealers to enjoy tax benefits, as
long as they turn their portfolios within 24
months and according to laid down
guidelines (1999)
• To encourage the transfer of technology and
skills, foreign investors allowed to acquire up
to 49% of local brokerage firms; and up to
70% of local fund management companies
(1999)
• Investments by Insurance companies on
listed securities exempted from tax arising
out of capital gains on sale of shares
(1996/97)
• Expenses incurred by companies in having
their financial instruments rated by an
independent rating agency are tax
deductible. (1997/98)
• Registered venture capital funds have been
accorded major tax incentives including tax
holidays of up to ten years on the funds
income (1997/98)
• Policy decision to facilitate the participation
of foreign investors in listed securities
subject to a maximum of 40% of the share
capital in aggregate and 5% for individual
investors, or such higher amount held by
foreign investors at the time of promulgation
of the regulation (1995/96)
• Reduction of withholding tax applicable to
dividend income arising from investment on
listed securities for both local and foreign
investors. Foreign 10%; Local 10% to7.5%
to 5%. (1995/96/97)
• Exemption of stamp duty and value added
tax on the transfer of listed securities
(1995)
• Costs of IPOs were made tax deductible
(1995)
• 35% Capital Gains Tax was introduced in
1975 (suspended since 1985)
18
Capital Raising in the Capital Markets
Table 1: Initial Public Offers, 1990 to date
Year Company Subscription rate (%) Amount raised (Kshs.)
1990 KCB 147 297,000,000
1991 KFC 110 40,800,000
1992 UCHUMI 103.20 232,000,000
1992 CROWN BERGER 104 138,000,000
1992 HFCK 400 126,000,000
1993 E A OXYGEN 100 42,400,000
1993 CMC 100 20,000,000
1994 FIRESTONE 101 1,420,000,000
1994 NBK 300 400,000,000
1994 NIC 77 718,000,000
1995 REA VIPINGO* 100 102,000,000
1996 REA VIPINGO 216 84,000,000
1996 KQ 194.60 2,664,000,000
1996 NBK 275 600,000,000
1996 KCB 150 560,000,000
1997 TPS 400 167,609,000
1997 ARM 250 281,750,000
1998 KCB 1,823,250,000
1999 HFCK < 100
2000 AFRICAN LAKES 150 378,000,000
2001 MUMIAS 60 1,125,000,000
2001 ICDCI 64 331,208,164
2006 KenGen 333 7,800,000,000
Scan Group 721,000,000
Equity Bank 0
Eveready East Africa 556,800,000
2007 Kenya Re’ 405 2,280,000,000
AccessKenya Group 800,000,000
Mumias ( offer for sale) 4,500,000,00
2008 Safaricom Ltd 532 50,000,000,000
Total amount raised 78,208,817,164
19
Table: Rights Issues 1989 – 2008
Year Company Rate Amount Raised (Kshs)
1989 Barclays 88,000,000
1990 ICDCI 70,966,196
1993 Marshalls 21,475,475
1994 KFC 1:3 44,875,000
1996 E A Portland 4:1 1,008,000,000
1997 EABL 1,488,275,775
1998 ICDCI 1:3 282,584,280
2000 UNGA 02:11 103,627,070
2000 Pan Africa Insurance 516,000,000
2001 Kenya Orchards 37:2 36,000,000
2001 Standard Newspapers 6:1 306,080,775
2001 Total Company 2:3 1,275,086,508
2003 Express Kenya 1:8 178,004,216
2004 KCB 1:3 2,748,026,872
2005 Uchumi Supermarkets 2:1 1,269,469,056
2005 CFC Bank 700,000,000
2006 Diamond Trust Bank 776,550,000
2007 Olympia Capital 3:1 420,000,000
NIC Bank 1:5 1,000,000,000
Diamond Trust Bank 1:6 4,500,000,000
2008 Housing Finance 1:1 To be announced
KCB 1:9 To be announced
TOTAL RAISED 16,833,021,22
20
LIST OF MEMBER FIRMS OF THE NAIROBI STOCK EXCHANGE
Drummond Investment Bank Limited
Hughes Building, 2nd floor,
P.O. Box 45465 00100
Nairobi.
Tel: 318690/318689
Fax.2223061
E-mail: info@drummond.co.ke
Web: www.drummond.co.ke
Dyer & Blair Investment Bank Ltd
Loita House, 10th floor,
P.O. Box 45396 00100
Nairobi
Tel. 3240000/2227803/4/5
Fax.2218633
E-mail: shares@dyerandblair.com
Web: www.dyerandblair.com
Ngenye Kariuki & Co. Ltd.
Corner House, 8th floor,
P. O. Box 12185-00400
Nairobi
Tel.224333/2220052/2220141
Fax.2217199/241825
E-mail: ngenyekari@wananchi.com
Web: www.ngenyestockbrokers.co.ke
Suntra Investment Bank Ltd
Nation Centre,10th Floor,
P.O. Box 74016-00200
Nairobi
Tel. 2870000/247530/2223330/2211846
0724- 257024, 0733-222216
Fax.2224327
E-mail: info@suntra.co.ke
Web: www.suntra.co.ke
Reliable Securities Ltd.
IPS Building, 6th Floor
P. O. Box 50338- 00200
Nairobi
Tel.241350/4/79
Fax.241392
E-mail: info@reliablesecurities.co.ke
CFC Financial Services
CFC Centre, Chiromo Rd
P.O. Box 47198 – 00100
Nairobi
Tel:3638900
Fax.3752950
E-mail: cfcfs@cfcgroup.co.ke.
Web: www.cfcbank.co.ke
Bob Mathews Stockbrokers Ltd
Nginyo Towers,3rd floor
P.O. Box 73253 – 00200
Tel 311898/313492/310540
Fax:2210279 Telefax: 341867
Cell: 0724-957345/0733-371629
E-Mail: bobmathews@bobmathewstocks.com
Website: www.bobmathewstocks.com
Afrika Investment Bank Ltd
Finance House, 9th Floor
P.O. Box 11019-00100
Nairobi
Tel: 2210178/2212989
Fax: 2210500
E-mail: info@afrikainvestmentbank.com
Website: www.afrikainvestmentbank.com
ABC Capital Ltd
IPS Building, 5th floor
P.O. Box 34137-00100
Nairobi
Tel: 246036/245971
Fax: 245971
E-mail: crossfield@wananchi.com
Sterling Investment Bank Ltd
Finance House, 11th Floor
P.O. Box 45080- 00100
Nairobi
Tel.2213914/244077/
0723153219/0734219146
Fax.2218261
E-mail: info@sterlingstocks.com
Web: www.sterlingstocks.com
ApexAfrica Investment Bank Ltd
Rehani House, 4th Floor
P.O. Box 43676- 00100
Nairobi
Tel: 242170/2220517
Fax: 2215554
E-mail: invest@apexafrica.com
Web: www.apexafrica.com
Faida Investment Bank Ltd.
Windsor House, 1st floor,
P. O. Box 45236-00100
Nairobi
Tel.243811/2/3
Fax.243814
E-mail: info@faidastocks.com
Web:www.faidastocks.com
NIC Capital Securities Ltd.
Kimathi House, 1st Floor
P.O. Box 63046-00200
Nairobi
Tel.2016482/3 244272/9
Mobile: 0724-951703
Fax.244280
E-mail: invest@nic-capital.com
Standard Investment Bank Ltd
ICEA Building, 16th floor,
P. O. Box 13714- 00800
Nairobi
Tel.2228963/2228967/2228969
Fax.240297
E-mail: info@standardstocks.com
Kestrel Capital (EA) Limited
ICEA Building, 5th floor,
P.O. Box 40005-00100
Nairobi
Tel2.251758/2251893,2251815,2250082
Fax.243264
E-mail:info@kestrelcapital.com
Web: www.kestrelcapital.com
Discount Securities Ltd.
International House, 4th floor,
P O Box 42489-00100
Nairobi
Tel. 2219552/38, 2773000
Fax. 2230987
E-mail: discount@dsl.co.ke
Web: www.dsl.co.ke
African Alliance Kenya Securities.
Ground Floor, Kenya Re Towers, Upper Hill
P.O. Box 27639 - 00506
Nairobi
Tel. 2735013/2735154/2735138/2710978
Fax. 2710247
E-mail: info@africanalliance.co.ke
Web: www.africanalliance.com
Renaissance Capital (Kenya) Ltd
Purshottam Place ,6th Floor
Westland , Chiromo Road
P.O BOX 40560-00100
Nairobi
Tel 3682000/3754422
Fax: 3632339
www.rencap.com
Genghis Capital Ltd.
Prudential Building, 5th Floor
P.O Box 1670-00100
Nairobi
Tel: 2337535/36
Fax: 246334
Email: info@gencap.co.ke
21
BUSINES DEVELOPMENT DEPARTMENT
THE NAIROBI STOCK EXCHANGE
NATION CENTRE 1ST FLOOR
Tel: +254 (020), 2831000
Fax +254 (020) 224200
For more info: www.nse.co.ke
CONTENTS
NSE’s Vision, Mission and Core Values
Fact Sheet
The Role of the Stock Exchange in the Economy
NSE Brief History
Listing requirement
A Chronology of Fiscal and Policy Incentives for the Capital Markets
Capital Raising activities in the market: IPOs and Rights Issue
Contact list of Member Firms
© NSE, BDD
Updated: Tuesday, November 11, 2008
THE NAIROBI STOCK EXCHANGE
Our vision
“To be a leading securities exchange in the world”
Our mission
“To provide a world class trading facility for wealth creation”
Our Core values
We believe in: -
i. People
ii. Integrity
iii. Professional Ethics
iv. Innovation
v. Confidentiality
vi. Fairness
vii. Excellence
© NSE, BDD
Updated: Tuesday, November 11, 2008
FACT SHEET
1. CONTACT ADDRESS Nation Centre, 1st Floor, Kimathi Street
P. O. Box 43633 - 00100, Nairobi, Kenya
Tel. +254 (020), 2831000
Fax. +254 (020) 2224200
E-Mail: info@nse.co.ke
Website; www.nse.co.ke
2. ESTABLISHED 1954
3. TRADING DAY/HOURS Monday to Friday 9.00 a.m. to 3.00 p.m.
4. NUMBER OF LISTED COMPANIES 59 (55 equities, 7 corporate bonds-3 of which have listed equities).
There are over 60
Government of Kenya treasury bonds listed on the fixed income
segment o f the securities exchange.
5. MARKET REGULATOR Capital Markets Authority of Kenya CMA (K). The Authority is
a government body mooted in 1989, under the Ministry of
Finance and through the Capital Markets
Authority Act Cap 485A (the CMA Act). The Authority was
established to regulate and oversee the orderly development
of Kenya’s capital markets
Rules and regulations available on the CMA Website:
www.cma.or.ke
6. INSTRUMENTS TRADED Equities, Preference shares, Treasury
Bonds & Corporate Bonds
7. INDEX NSE All Share Index (NASI) and NSE 20-Share Index
BASIS OF INDEX CALCULATION NASI is market capitalization weighted while NSE 20 Share
Index is geometric Mean of 20 Companies share prices.
8. DELIVERY & SETTLEMENT Done through Central Depository and Settlement Corporation
(CDSC)
9. BROKERAGE RATES
Costs to Investors - Transaction Levy Breakdown (% of the value of an Equity transaction)
0.12%
0.01%
0.12%
0.01%
NSE Transaction Levy
NSE Investor Compensation Fund
0.12%
0.01%
0.12%
0.01%
CMA Transaction Levy
CMA Investor Compensation Fund
0.06% 0.06% CDSC Transaction Levy
1.68% 1.78% Stockbroker Commission
2.00% 2.10%
Note: Although commissions are fully negotiable, industry practice is that the highest commission chargeable is 1.78%, applicable
to amounts upto Kshs. 100,000.00; above Kshs. 100,000.00, commissions are fully negotiable, subject to a maximum of 1.5%.
Stockbrokerage commission shall be limited to Kshs. 100 for odd lot transactions upto Kshs 3000 excluding statutory fees. Odd lot
transactions in excess of Kshs. 3000 shall be charged a commission at the prescribed rate of 1.8% excluding statutory fees.
Costs to Investors - Transaction Levy Breakdown (% of the value of Corporate and Treasury Bond transactions)
The only commission levied on Bonds is the Stockbrokerage commission: Minimum is Kshs. 500.00.
A 0.0625% commission of the value of the transaction is chargeable on amounts upto Kshs. 50.0 million. Commissions for amounts
above Kshs. 50.0 million are fully negotiable.
10. TAXES Withholding tax on dividend income is 5% for
Locals and 10% for non-residents
© NSE, BDD
Updated: Tuesday, November 11, 2008
Capital Gains Tax - Suspended since 1985
Withholding tax on interest income from listed corporate bonds and
Government of Kenya treasury bonds is 15%
12. FOREIGN INVESTMENT HOLDINGS 25.0% of the issued share capital of a listed company is reserved for
resident investors while the balance becomes a free float for all classes
of investors.
13. DETAILS OF REGISTRATION To be able to trade, equity securities should be deposited
with Central Depository and Settlement Corporation (CDSC); since
November 2004.
14. FOREIGN EXCHANGE CONTROLS All controls have been abolished.
15. RULES & REGULATIONS Available on the NSE website: www.nse.co.ke
THE BOARD OF DIRECTORS OF THE NSE
James Wangunyu - Chairman
Bob Karina
Edward Njoroge
David Njoroge
Esther Koimett
Edward Odundo
Lutaf Kassam
Stanley Ngaine
George A. Maina
Andre Desimone
Christopher Michael Mwebesa - Chief Executive
Lillian Mbindyo – Company Secretary
© NSE, BDD
Updated: Tuesday, November 11, 2008
The Role of the Stock Exchange in the Economy
The Stock Exchange is a market that deals in the
exchange of securities issued by publicly quoted
companies and the Government
The major role that the stock exchange has played, and
continues to play in many economies is that it promotes
a culture of thrift, or saving. The very fact that
institutions exist where savers can safely invest their
money and in addition earn a return, is an incentive to
people to consume less and save more.
Secondly, the stock exchange assists in the transfer of
savings to investment in productive enterprises as an
alternative to keeping the savings idle. It should be
appreciated that in as much as an economy can have
savings, the lack of established mechanisms for
channeling those savings into activities that create
wealth would lead to mis-allocation or waste of those
savings. Therefore, even if a culture of saving were to
be encouraged, the lack of developed financial markets
may lead to economic stagnation.
Thirdly, a robust stock market assists in the rational and
efficient allocation of capital, which is a scarce resource.
The fact that capital is scarce means systems have to
be developed where capital goes to the most deserving
user. An efficient stock market sector will have the
expertise, the institutions and the means to prioritise
access to capital by competing users so that an
economy manages to realise maximum output at least
cost. This is what economists refer to as the optimum
production level. If an economy does not have efficient
financial markets, there is always the risk that scarce
capital could be channeled to non-productive
investments as opposed to productive ones, leading to
wastage of resources and economic decline.
Fourthly, stock markets promote higher standards of
accounting, resource management and transparency in
the management of business. This is because financial
markets encourage the separation of owners of capital,
on the one hand, from managers of capital, on the
other. This separation is important because we
recognise that people who have the money may not
necessarily have the best business ideas, and people
with the best ideas may not have the money. And
because the two need each other, the stock exchange
becomes the all-important link. To give a practical
example, if an entrepreneur has a bright business idea
and lacks the money, he can approach the Nairobi
Stock Exchange, float shares and raise the capital he
needs to turn his idea into a business. The shareholders
will then appoint directors and management to run the
company on their behalf. This arrangement benefits
both parties because the manager of capital, who is the
entrepreneur, gets access to capital to turn his idea into
a reality, while the owners of capital, who are the
shareholders, get a return on their investment without
having to report for work at that company.
Fifthly, the stock exchange improves the access to
finance of different types of users by providing the
flexibility for customisation. This is made possible as the
financial sector allows the different users of capital to
raise capital in ways that are suited to meeting their
specific needs. For example, established companies can
raise short term finance through commercial paper;
small companies can raise long term capital by selling
shares; the Government and even municipal councils
can raise funds by floating various types of bonds as an
alternative to foreign borrowing.
Sixthly, and very important, is that the stock exchange
provides investors with an efficient mechanism to
liquidate their investments in securities. The very fact
that investors are certain of the possibility of selling out
what they hold, as and when they want, is a major
incentive for investment as it guarantees mobility of
capital in the purchase of assets.
There are many others less general benefits
which stock exchanges afford individuals,
corporations and even the Government.
1. The mobilization of savings for investment in
productive enterprises as an alternative to putting
savings in bank deposits, purchase of real estate
and outright consumption.
2. The growth of related financial services sector e.g.
insurance, pension and provident fund schemes
which nurture the spirit of savings.
3. The check against flight of capital which takes
place because of local inflation and currency
depreciation.
4. Encouragement of the divorcement of the owners
of capital from the managers of capital; a very
important process because owners may not
necessarily have the expertise to manage capital
investment efficiently.
5. Encouragement of higher standards of accounting,
resource management and public disclosure which
in turn affords greater efficiency in the process of
capital growth.
6. Facilitation of equity financing as opposed to debt
financing. Debt financing has been the undoing of
many enterprises in both developed and
developing countries especially in recessionary
periods.
7. Improvement of access to finance for new and
smaller companies. This is now possible on the
Alternative Investments Market Segment (AIMS).
This can also be realised through Venture Capital
institutions which are fast becoming key players in
financing small businesses.
8. Encouragement of public floatation of private
companies which in turn allows greater growth
and increase of the supply of assets available for
long-term investment.
The establishment of an efficient stock market is,
therefore, indispensable for any economy that is keen
on using scarce capital resources to achieve economic
growth.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
6
CHRONOLOGY OF EVENTS- NSE BRIEF HISTORY:
1920: In Kenya, dealing in shares and stocks started in
the 1920's when the country was still a British colony.
There was however no formal market, no rules and no
regulations to govern stock broking activities. Trading
took place on a gentleman's agreement in which
standard commissions were charged with clients being
obligated to honour their contractual commitments of
making good delivery, and settling relevant costs. At
that time, stock broking was a sideline business
conducted by accountants, auctioneers, estate agents
and lawyers who met to exchange prices over a cup of
coffee. Because these firms were engaged in other
areas of specialisation, the need for association did not
arise.
1951: An Estate Agent by the name of Francis
Drummond established the first professional stock
broking firm. He also approached the then Finance
Minister of Kenya, Sir Ernest Vasey and impressed upon
him the idea of setting up a stock exchange in East
Africa.
1953: The two approached London Stock Exchange
officials in July of 1953 and the London officials
accepted to recognize the setting up of the Nairobi
Stock Exchange as an overseas stock exchange.
1954: The Nairobi Stock Exchange was constituted as
a voluntary association of stockbrokers registered under
the Societies Act. Since Africans and Asians were not
permitted to trade in securities until after the
attainment of independence in 1963, the business of
dealing in shares was then confined to the resident
European community. At the dawn of independence,
stock market activity slumped due to uncertainty about
the future of independent Kenya.
1963: The first three years of independence, were
marked by steady economic growth, rekindling
confidence in the market. The exchange also handled a
number of highly oversubscribed public issues.
1972: Growth was however halted when the oil crisis
introduced inflationary pressures in the economy that
depressed share prices.
1975: A 35% Capital Gains Tax was introduced in
1975 (suspended since 1985), inflicting further losses to
the exchange which at the same time lost it's regional
character following nationalizations, exchange controls
and other inter-territorial restrictions introduced in
neighboring Tanzania and Uganda. For instance in
1976 Uganda compulsorily acquired a number of
companies, which were either quoted or subsidiaries of
companies quoted, on the Nairobi Stock Exchange.
1980: The Kenyan Government realized the need to
design and implement policy reforms to foster
sustainable economic development, and supported by
an efficient and stable financial system. In particular, it
set out to enhance the role of the private sector in the
economy, reduce the demands of public enterprises on
the exchequer, rationalize the operations of the public
enterprise sector, broaden the base of local ownership
and at the same time enhance capital markets
development.
1984: IFC/CBK study, "Development of Money and
Capital Markets in Kenya" became a blueprint for
structural reforms in the financial markets which
culminated in the formation of a regulatory body, 'The
Capital Markets Authority (CMA), in 1989. The overall
objective of the CMA is to assist in the creation of an
environment conducive for the growth and development
of the country's capital markets.
1988: The first privatization through the NSE is
the successful sale of a 20% government stake in
Kenya Commercial Bank. The sale leaves the
Government of Kenya and affiliated institutions
retaining 80% ownership of the bank.
1991: The NSE is registered under the Companies Act
and phases out the "Call Over" trading system in favour
of the floor based Open Outcry System.
1994: The NSE 20-Share Index recorded an all-record
high of 5030 points on Feb. 18, 1994. The NSE is rated
by the International Finance Corporation (IFC) as the
best performing market in the world with a return of
179% in dollar terms. An extensive modernization
exercise is undertaken, including a move to more
spacious premises at the Nation Centre in July 1994,
setting up a computerized delivery and settlement
system (DASS) and a modern Information Centre. For
the first time since the formation of the Nairobi Stock
Exchange, the number of stockbrokers increased with
the licensing of 8 new brokers.
1995: The Kenyan Government relaxed restrictions on
foreign ownership in locally controlled companies
subject to an aggregate limit of 20% with any single
holding not exceeding 2.5%. To help encourage foreign
portfolio investments these were doubled to 40% and
5% respectively in the June 1995 budget. The entire
Exchange Control Act was repealed in December 1995.
Seven more stockbrokers are licensed, bringing the
number to twenty from the original six (one of which
still survives) at the inception of the exchange in 1954.
Commission rates were reduced considerably from
2.5% to between 2% and 1 % on a sliding scale for
equities and 0.0625% for all fixed interest securities.
1996: The largest share issue in the history of NSE, the
privatization of Kenya Airways, comes to the market.
Having sold a 26% stake to KLM, the Government of
Kenya proceeded to offer 235,423,896 shares (51% of
the fully paid and issued shares of Kshs. 5.00 each) to
the public at Kshs. 11.25 per share. More than 110,000
shareholders acquired a stake in the airline and the
Government of Kenya reduced its stake from 74% to
23%. The Kenya Airways Privatization team was
awarded the World Bank Award for Excellence for 1996
for being a model success story in the divestiture of
state-owned enterprises.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
7
1998: The government expands the scope for foreign
investment by introducing incentives for capital markets
growth including the setting up of tax-free Venture
Capital Funds, removal of Capital Gains Tax on
insurance companies' investments, allowance of
beneficial ownership by foreigners in local stockbrokers
and fund managers and the envisaged licensing of
Dealing Firms to improve market liquidity.
1999: Kenya adopts the International Accounting
Standards (IAS) as the local Accounting Standards with
effect from January I, 1999.
2000
March 2000:
The African Lakes Corporation plc, a company
incorporated in Scotland and listed on the London Stock
Exchange, listed its shares on the Nairobi Stock
Exchange and raised £ 3.2 million gross of expenses.
African Lakes Corporation plc, is the majority
shareholder in African Online, then Africa’s largest
internet service provider.
1st August 2000: The NSE implements a new Trading
cycle, (T+5). The Central Depository System (CDS) Act
and the amended CMA Act (which covers Collective
Investment Schemes (CIS)) are passed by Parliament
and receive presidential assent, paving the way for the
full implementation of the CDS and for the introduction
of collective investment schemes in the Kenyan market.
5th September 2000: Following the signing of a
Partnership Agreement with the Association of National
Numbering Agencies (ANNA), the NSE was appointed as
the National Numbering Agency (NNA) for Kenya. The
NNA is responsible for issuing the ISIN for financial
securities issued under Kenyan jurisdiction in
accordance with the ISO 6166 guidelines issued by
ANNA.
October 2000: NSE becomes a member of the
Association of National Numbering Agencies (ANNA),
the global securities numbering agency.
November 2000: The Company for Habitat and
Housing in Africa, “Shelter-Afrique” issued the first
tranche of a medium term floating rate note worth
Kshs. 350.00 million. The net proceeds would be used
to fund the issuer’s investment in housing development
projects in Kenya. The issue would have a minimum
maturity of 18 months and a maximum maturity of 36
months. The coupon was linked to the 91-day Treasury
bill rate plus a 0.75% premium.
December 2000: Through its wholly owned
subsidiary, CFC Financial Services Ltd., CFC Bank
became the first licensed Securities Dealer on the
Nairobi Stock Exchange and was also licensed as an
investment advisor.
2001
March 2001:
African Lakes Corporation plc: On March 2, 2001,
African Lakes Corporation plc went to the market to
raise up to £8.4 million (net of expenses). Qualifying
shareholders were invited to subscribe for up to
34,903,956 new ordinary shares (29 pence per share)
or 4 new ordinary shares for every 11 existing ordinary
shares.
East African Breweries Ltd.: On March 27, 2001,
East African Breweries Ltd became the first company on
the Nairobi Stock Exchange to cross list on the Uganda
Securities Exchange (USE).
June 2001: Safaricom Ltd., Kenya’s first cellular phone
operator, offers medium term floating rate secured
notes with a 5 year maturity and worth Kshs. 4.0 billion.
The issue has a credit enhancement, provided by
Citibank, N.A., New York to cover upto 75% of the
amount of any unpaid scheduled payments of principal
and interest on the Notes. The coupon is linked to the
Government of Kenya 91-day Treasury bill rate plus a
1.00% premium.
July 2001: On July 11, 2001, the East African
Development Bank listed a Kshs. 2.0 billion, floating
rate, medium term note. The paper has a maturity of 5
years and a coupon rate linked to Government of Kenya
91-day Treasury bill rate plus a 0.75% premium.
November 14 2001:
Mumias Sugar Company
Following its privatization through a sale of government
shares to the public, Mumias Sugar Company lists on
the Nairobi Stock Exchange’s official list.
December 20 2001: 8 million additional shares of
ICDC Investment Company are admitted to the official
list of the NSE. ICDC Investment Company is Kenya’s
only listed Investment Company.
2002:
March 28, 2002
On March 28 2002, Kenya Airways became the second
company listed on the Nairobi Stock Exchange to cross
list its shares on the Uganda Securities Exchange (USE).
17 April 2002
The CMA announced the approval of the new NSE
trading and settlement rules. In summary, the amount
for block trades was revised upwards from Kshs. 3.0
million to between Kshs. 50.0 – 200.0 million. The block
trade rules now apply to trade values of above Kshs.
50.0 million but less than Kshs. 200.0 million. Lastly,
the brokerage commissions’ regime was liberalized.
1 May 2002
CFC Financial Services Limited is licensed as the first
non deposit taking Investment Bank. This was based on
its successful purchase of the entire share capital of an
existing licensed broker - Equity Stockbrokers Ltd., and
after its satisfactory performance as a dealer and its
compliance with the CMA requirements for licensing of
Investment Banks.
15 July 2002
As part of measures aimed at mobilizing domestic
savings through investment in financial assets, the CMA
gave approval to African Alliance Ltd. and Old Mutual
Ltd. to promote collective investment schemes (CIS) in
the form of unit trusts.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
8
15 July 2002
African Alliance Kenya was licensed as a non-deposit
taking Investment Bank on acquisition of a majority of
100% of an existing licensed broker – Kenya Wide
Securities Ltd.
26 July 2002
New Foreign Investor Regulations:
The foreign investor regulations are amended,
providing for a 25% minimum reserve of the issued
share capital for Kenyan citizens, while the balance of
the 75% becomes a free float for all classes of
investors. Within this 75% share holding available to all
classes of investor, there is no restriction on the amount
to be held by a single foreign investor. Additionally, the
following categories of investor have been defined:
Foreign institutional, Foreign individual, East African
institutional, East African individual, Local institutional,
Local individual (where East African is defined as a body
corporate registered in either Uganda or Tanzania or a
citizen of Uganda or Tanzania).
5 August 2002
The signing of the shareholders’ agreement for the
Central Depository and Settlement Corporation (CDSC).
The shareholders consisted of the Nairobi Stock
Exchange (20%), the Association of Kenya Stockbrokers
(18%), the CMA Investor Compensation Fund (7%),
and 9 institutional investors through the Capital Markets
Challenge Fund (50%); who collectively have invested
in the Central Depository and Settlement Corporation
(CDSC). The CDSC being the legal entity that owns and
runs the clearing, settlement, depository and registry
system for securities traded in Kenya’s capital markets.
23 October 2002
Mabati Rolling Mills Ltd. successfully completed the
launch of its first Kshs. 1.0 billion floating rate bond;
with a tenor of 5 years. The coupon was linked to the
Government of Kenya 91-day Treasury bill rate plus a
1.25% premium. The bond issue was part of the
ongoing financial restructuring of the firm.
31 October 2002
Mr. Goa Xiqing, Vice Chairman of the China Security
Regulatory Commission (CSRC) led a delegation from
the CRSC on the first such official visit by
representatives from the Chinese Capital Markets to the
NSE. Senior NSE officials including the then Chairman,
Ambassador Bethuel Kiplagat, Vice Chairman Mr.
William Murungu, and NSE Chief Executive Mr. Kibuga
Kariithi graced the occasion. In 2002, the Chinese
economy, for the first time supplanted the United
States, as the destination for the highest value of global
FDI flows.
22 November 2002
As of 22 November 2002, the NSE became the sole
NNA in Kenya, responsible for allocating the unique
code for quoted and unquoted securities domiciled in
Kenya.
2003
4 February 2003
The Directors of African Lakes Corporation plc (ALC)
resolved to cancel the company’s entire issued ordinary
share capital from the official list of the London Stock
Exchange and the Nairobi Stock Exchange. Thereafter
the shares would cease trading on the NSE’s main
investment market segment.
East African Packaging Ltd.
On February 14, 2003, Canadian Overseas Packaging
Industries Limited (COPIL) declared their intention to
takeover all the shares not held by themselves in East
African Packaging. At the time of the declaration, COPIL
owned 75% of all the issued shares in East African
Packaging Ltd.
After the takeover, EAPI applied for voluntary delisting
as provided in both the CMA Public Offers and Listing
Requirements and in the NSE Listing Manual.
24 March 2003
The Central Depository and Settlement Corporation in
collaboration with the NSE commenced the CDS
Education Campaign in preparation for the market
automation. The first CDS Education Workshop, with
the theme “The CDS Legal & Regulatory
Framework” kicked off. The objective of the workshop
was to update stakeholders on the CDS project and
clarify outstanding issues with key stakeholders.
27 March 2003
The NSE, together with professional speakers drawn
from the stock broking community, leading banks and
Investment Advisors, facilitated the seminar entitled
“Let Money Work for you”. The target audience for
the seminar was for leaders in the savings and credit
co-operative societies (SACCOS) sector with the
objective of illustrating the greater investment and
fundraising opportunities available through the NSE for
the growth and development of the sector. Kenya’s
sector is the most vibrant in Africa, with figures for
2003 as follows - USD. 1 billion, approximately 8% of
GDP, comprising over 3000 registered SACCOs, with a
membership estimated at close to 5 million.
December
For the year ending 31 December 2003, the exchange
recorded an equity turnover exceeding Kshs. 15.25
billion, more than the combined equity turnover
recorded in the previous 5 years; the number of shares
traded was 381.2 million. The bond market recorded a
turnover of Kshs 42 billion, a 24.85 % increase over the
previous year’s turnover of Kshs. 33.629 billion
2004
July
Kenya Commercial Bank (KCB) Rights Issue
On July 7 2004, the additional shares resulting from the
Kenya Commercial Bank (KCB) rights issue began to
trading on the Nairobi Stock Exchange. Kenya
Commercial Bank Rights issue (50 million shares –
through the issuance of 1 right for every 3 existing
shares) at a price of Kshs 49.00, were oversubscribed
by 12.25%. The bank raised Kshs 2.75 billion,
compared to Kshs 2.45 billion it intended to raise.
The Government of Kenya renounced its rights, diluting
its ownership from 35% to 25% (52,360,000 ordinary
shares) and at the same time enabling the Kenyan
taxpayer to own a piece of KCB using the capital
markets.
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
9
Kenya Oil Company (KENOL) Rights Issue
KENOL shareholders approved the recommendation of
their Directors to split the 15,000,000 ordinary shares
of Kshs. 5 each in the proportion of Ten (10) shares for
every one held. Consequently, the number of shares
authorized became 150,000,000 ordinary shares of
Kshs. 0.50 each and the number of shares issued and
listed became 100, 796,120 ordinary shares of
Kshs.0.50 each in the capital of the company.
August
East African Development Bank
On August 9, 2004, the East Africa Development Bank
listed a Kshs. 800.0 million bond with a fixed interest
rate of 7.5% and a tenor of 7 years. Besides being the
only non Government of Kenya bond with a fixed
coupon, at the time of its listing, it had the longest
maturity of a non Government of Kenya bond listed on
the Exchange.
8 October 2004
Kenya Airways
Kenya Airways, with a primary listing on the Nairobi
Stock Exchange and a secondary listing on the Uganda
Securities Exchange, became the first company to have
a listing on all the three East African stock exchanges,
after listing its shares on the Dar-es-Salaam Stock
Exchange.
November
East African Breweries
29 November 2004 was the date of commencement in
trading of the new East African Breweries shares. This
was after the shareholders approved the increase in
authorised share capital, the bonus share issue (The
issued share capital of 109,829,772 ordinary shares of
Kshs. 10.00 each, increased by an additional
21,965,954 ordinary shares of Kshs. 10.00 each.) and
the share split at their annual general meeting held on
21 October 2004. The approvals resulted in the
increase of the share capital of the Company to Kshs.
2.0 billion and each ordinary share of Kshs. 10.00 being
subdivided into 5 ordinary shares of Kshs. 2.00 each.
Nairobi Stock Exchange Golden Jubilee
The NSE celebrated its 50-years of existence, and also
had the privilege of hosting the 8th ASEA conference. In
this celebration, the first NSE magazine dubbed “The
Exchange” and, The Central Depository & Settlement
Corporation (CDSC), which manages Central Depository
Systems, were both launched.
December
For the year ending 31 December 2004, the exchange
recorded an equity turnover exceeding Kshs. 22.32
billion; an increase of 46.37% over the corresponding
period for 2003. The number of shares traded was
625.3 million. The bond market recorded a turnover of
Kshs 34.1 billion, a 18.75 % decrease compared to the
previous year’s turnover. This was caused by a sharp
rise in short term interest rates in the third quarter of
2003 causing huge capital losses in the bond portfolios
of institutional investors.
2005
31 March 2005
On 31 March 2005 TPS Holdings Ltd. (TPSH),
announced that it had applied to the Capital Markets
Authority for approval of the proposed acquisition by
way of share exchange offer of up to 9,025,100
ordinary shares of Kshs. 5.00 each in Tourism
Promotion Services Limited (TPSL) not already owned
by TPS Holdings Ltd., (comprising 23.3% of the issued
shares of TPSL).
TPSH which already owned 76.7% of the issued shares
of TPSL, was in the process of consolidating its
ownership of TPS companies in Kenya, Tanzania and
Zanzibar, which implemented in full, would lead the
creation of an integrated hotels and tourism business
spanning the East African region.
If the share exchange were concluded and subject to
obtaining all the necessary statutory and regulatory
approvals, TPSH would acquire the remaining 23.3%
held by the public in TPSL. Subsequently, TPSH would
delist TPSL and list TPSH on the Nairobi Stock
Exchange.
April 2005
Faulu Kenya a microfinance institution, issues a Kshs.
500.0 million, 5 year floating rate note, with a margin of
0.5% above the most recent published average interest
rate for the Kenya Government 91 day Treasury bill.
Credit enhancement was provided by Agence Française
de Développement (AFD) for the tenor of the Issue, in
the form of a standby letter of credit covering 75% of
the aggregate of any unpaid principal and interest
(except default interest) due and payable under the
Notes (but subject to a limit of the Kenya Shilling
equivalent of 6.0 million euros. It is the first time that a
micro finance institution has come to the capital
markets to raise capital.
June 2005
On 29 June 2005, East African Breweries Ltd, with a
primary listing on the Nairobi Stock Exchange and a
secondary listing on the Uganda Securities Exchange,
became the second company to be cross listed on all
the three East African securities exchanges after listing
on the Dar-es-Salaam Stock Exchange.
July 2005
The Eastern and Southern African Trade and
Development (PTA) Bank, offered and listed medium
term floating rate notes with a 7 year maturity and
worth Kshs. 800.0 million.. The coupon was linked to
the Kenya Government 91-day Treasury bill rate plus a
1.00% premium.
Uchumi Supermarkets Rights Issue
The Uchumi Supermarkets rights issue which offered 2
new shares for every share owned on the record date
of 22 August 2005, was oversubscribed by 5.8%. The
minimum amount sort was Kshs. 850.0 million; with the
intended amount being set at Kshs. 1.2 billion. The
actual amount raised by the rights issue was Kshs.
1.269 billion.
The key shareholders of Uchumi – ICDCI, ICDC and
KWAL Holdings traded a majority of their rights through
For more information, please contact NSE Business Development Department – Tel: +254-20-2831000/2831256, Fax: +254-20-
224200
10
the Stock Exchange. Their joint holding in Uchumi was
diluted from 51.5% to 23.6%, resulting in a more
distributed shareholding, and enabled Uchumi to shed
its parastatal status.
The above process can also be considered a partial
privatisation by the Government through the Nairobi
Stock Exchange and can be applied to other institutions
in which the Government has a significant shareholding
such as National Bank of Kenya (NBK), Kenya Power
and Lighting Company (KPLC), East African Portland
Cement (EAPC) and Housing Finance (HF).
Through a transparent and accountable process, the
Government accomplished two policy objectives -
facilitating the development of Kenya’s private sector
and concurrently raising revenues to fund its budget
deficit.
September 2005
The Kshs. 800.0 million Athi River Mining Company
(ARM) medium term note which would pay interest with
a margin of 1.75% above the most recent published
average interest rate for the 91 day Kenya Government
Treasury bills was listed on the Stock Exchange. It was
both the first credit rated and first unsecured corporate
bond in the Kenyan market. While it is not an
endorsement by the NSE to invest in the ARM bond, it
is an acknowledgment of the growing sophistication of
the Kenyan investor in terms of analyzing risk and
return. ARM was given an investment grade credit
rating of an A (long-term) and A1 (short-term) from the
Global Credit Ratings Company of South Africa.
December
BOC Kenya Ltd.
On December 1, 2005, BOC Kenya served a Notice of
Intention on the Directors of Carbacid Investment
Company, and other requisite parties in accordance
with Regulations 4 (1) and 4 (2) of the Capital Markets
(Takeovers & Mergers) Regulations 2002, informing
them of BOC Kenya’s intention to acquire effective
control of Carbacid. Both companies are incorporated in
Kenya and listed on the Nairobi Stock Exchange. BOC
Kenya made a conditional offer to all the shareholders
of Carbacid Investments Ltd., to acquire the entire
issued share capital of Carbacid (excluding 660,000
ordinary shares of Carbacid held by Kivuli Ltd., a wholly
owned subsidiary of BOC Kenya) comprising 10,666,755
ordinary shares of Kshs. 5.00 each.
Shelter Afrique
On December 2 2005, the Capital Markets Authority and
the Nairobi Stock Exchange approved the issue and
listing of the Kshs. 500.0 million unsecured
floating/fixed rate notes issued by The Company for
Habitat and Housing in Africa, “Shelter-Afrique”. The
notes have a maturity of 3 years. The first tranche (the
floating rate component, priced at a premium above the
most recent published average interest rate of the 91-
Day Government of Kenya treasury bill rate) of Kshs.
200.00 million is expected to be issued in January 2006,
whilst the second tranche of Kshs. 300.00 million,
expected in April 2006 will be issued at a fixed rate yet
to be determined.
Celtel Kenya Ltd.
On 14 December 2005, Celtel Ltd., Kenya’s second cell
phone operator, listed a Kshs. 4.5 billion, 4- year,
floating rate, medium term note.
The medium term noted, which will pay an interest
premium of 1.25% above the prevailing 91-day
treasury bill rate is 75% guaranteed by FMO, a
specialised financial institution, 51% owned by the
Dutch Government, and whose objective is to
contribute to the advancement of productive enterprise
in developing countries. The Guarantee which covers all
credit risks during the lifetime of the issue, including
political risks, is irrevocable and unconditional, and will
cover investors irrespective of the cause of the payment
default.
The medium term note will be used to fund capital
investment in the Celtel network; and general working
capital needs. It will result in the improvement of the
telecommunications network for Celtel Kenya’s over 1.6
million subscribers and overall, enhance the quality of
life of Kenyan citizens by facilitating their ability to
communicate with each other.
CFC Bank Ltd.
On 23 December 2005, CFC Bank officially listed 12.0
million new shares, arising out of its just successfully
completed rights issue. The rights issue increased the
authorised share capital of CFC Bank Ltd., to 156.0
million ordinary shares of Kshs. 5.00, all of which are
listed on the Stock Exchange. The rights issue was
necessitated by the fact that as financial services
become increasingly competitive and banks convert into
integrated financial services providers, Central Banks
across the world are urging banks under their
jurisdiction to comply with the impending Basel II
regime on capital allocation for risk weighed assets.
End Year Performance
For the year ending 31 December 2005, the exchange
recorded an equity turnover exceeding Kshs. 36.52
billion (a 63.61% increase over the previous year’s
performance of Kshs. 22.32 billion), the number of
shares traded was 874.199 million (a 39.80% increase
over the previous year’s performance of 625.33 million
shares. Bond market performance was disappointing;
recording a decline of 60.16% in the value of
transactions from Kshs. 34.11 billion recorded in 2004
to Kshs. 13.59 billion recorded for 2005.
March 2006
Introduction of the Shares of TPS Eastern
Africa
March 20 2006 marked the official introduction of the
89,865,587 ordinary shares of one shilling each of
TPS Eastern Africa (formerly TPS holdings Ltd.) and
familiarly known as Serena; the only publicly listed
holding company in East Africa’s tourism industry.
The introduction was necessitated by recent
developments such as the integration of the
Tanzanian hotels and lodges with the existing
operations of Tourism Promotion Services Ltd. in
Kenya. TPS Eastern Africa (Serena) has indicated that
the future development of the business includes the
integration of the other Serena Group properties in
Uganda and Mozambique and the cross listing of the
shares of TPS Eastern Africa on the Dar-es-Salaam
Stock Exchange and the Uganda Securities Exchange.
May 2006
KenGen Initial Public Offering
On May 17, 2006, the shares of Kenya Electricity
Generating Company (KenGen) began to trade on the
Exchange. The privatization of the generator of 80
per cent of Kenya’s electricity was 337 per cent
oversubscribed. The Government of Kenya therefore
easily met its target of raising Kshs. 7.8 billion (USD.
102.9 million) from the market for the 30 per cent of
the shares of KenGen that it offered to the public.
The above process can also be considered a partial
privatisation by the Government through the Nairobi
Stock Exchange and can be applied to other
institutions in which the Government has a significant
shareholding such as National Bank of Kenya (NBK),
Kenya Power and Lighting Company (KPLC), East
African Portland Cement (EAPC) and Housing Finance
(HF).
Through a transparent and accountable process, the
Government accomplished two policy objectives -
facilitating the development of Kenya’s private sector
and concurrently raising revenues to fund its budget
deficit.
June 2006
Suspension of the Listing and Trading of the
Shares of Uchumi Supermarkets
On 1 June 2006, following the receipt of a resolution
of the Board of Directors of Uchumi Supermarkets
dated 31 May 2006 indicating that the company was
insolvent, the Capital Markets Authority, in pursuant
to powers granted by section 11 (3) (L) of the Capital
Markets Act (as amended by the Capital Markets
Authority Act 2000), and pursuant to the
requirements of section 22 of the Capital Markets
Securities (Public Offers, Listing and Disclosures)
Regulations 2002, suspended the listing and trading
of the shares of Uchumi Supermarkets at the Stock
Exchange.
August 2006
Introduction of the Shares of Equity Bank
August 7 2006 marked the occasion of the official
introduction of the shares of Equity Bank on the
official list of the main investment segment of the
NSE. At the time of listing, Equity Bank, whose main
business is the provision of retail banking and
microfinance services was already a public company
83.55 per cent owned by over 2,416 indigenous
shareholders, 10.93 per cent by Britak Investment
Company Limited and 5.52 per cent by Africap
Microfinance Fund Ltd., (a consortium of international
development investors principally the International
Finance Corporation (IFC) and the European
Investment Bank).
The listing highlights one of the main functions of a
securities exchange, which is to provide a trading
platform to facilitate the efficient and transparent
transfer of financial securities, thereby reducing the
risk to the investor of holding the asset and at the
same time, through the principle of supply and
demand, providing an indicative value of the security.
August 29 2006
The Official Listing of the Entire Issued Share
Capital of Scangroup
The official listing of the entire issued share capital of
Scangroup comprising 159.0 million issued and fully
paid ordinary shares ocurred. Scangroup, which is a
holding company for Media Initiative East Africa,
Lowe Scanad (Kenya, Uganda and Tanzania),
Thompson Kenya, McCann Kenya, Grey East Africa,
Draft Worldwide East Africa, Scanad PR and Universal
McCann East Africa, made history by being the first
media and advertising firm to list in East Africa.
This followed the successful offer to the public to
subscribe to 9.0 million new shares and the sale of
60.0 million existing shares by the vendor – Mr.
Bharat Thakrar; also to the public at Kshs. 10.45 per
share. The allocation results of the offer of 69.0
million ordinary shares of Scangroup released on
August 23, 2006, indicated that the public offer
attracted 96,459 valid applications for a total number
of 428,386,000 ordinary shares; Kshs. 4.48 billion
was received; an oversubscription of Kshs. 3.8 billion
equivalent to 6.21 times the Initial Public Offer (IPO)
amount of Kshs. 721.0 million. Post IPO, the key
employees of the company held 11.5% of the
company and Mr. Thakrar remained the largest
shareholder retaining 28.5% of the issued shares in
the listed company.
On the first day of trading, the share traded at a low
of Kshs. 12.00, reached a high of Kshs. 20.00 and
closed the trading session at an average trading price
of Kshs. 15.00.
September 2006
Commencement of Automated Trading
Monday 11 September 2006 saw the implementation
of live trading on the automated trading systems of
the Nairobi Stock Exchange.
The ATS is sourced from Millennium Information
Technologies (MIT) of Colombo, Sri Lanka, who are
also the suppliers of the Central Depository System
(CDS). MIT have also supplied similar solutions to the
Colombo Stock Exchange and the Stock Exchange of
Mauritius.
To ensure that there were no significant departures
from the overall trading principles in our market the
NSE ATS solution was customised to uphold the spirit
of the Open Outcry Trading Rules in an automated
environment.
Trading hours also increased from two (10:00 am –
12:00 pm) to three hours (10:00 am – 1:00 pm).
Other innovations included the removal of the block
trades board and introduction of the functionality for
the trading of rights in the same manner as equities.
Besides trading equities, the ATS is also fully capable
of trading immobilised corporate bonds and treasury
bonds.
The anticipated benefits of the new system include
greater transparency in the placement of bids and
offers. The system will also improve market
surveillance and transmit almost in real time, trading
information relating to index movements and price
and volume movements of traded securities. More
current information will become readily available to a
wider constituency of our stakeholders, facilitating
the decision making process and lowering the risk of
participating in our markets. As such the Exchange
views a situation where it will soon have an
opportunity to enhance its revenue streams through
information vending to our stakeholders.
November 27 2006: Singning of MoU between
the Nairobi Stock Exchange and Uganda
Securities Exchange on mass cross listing
The MoU will allow listed companies in both
exchanges to dualist. This will facilitate growth and
development of the regional securities markets.
Some of NSE’s listed companies that have dual- listed
include: Kenya Airways, East Africa Breweries and
Jubilee Holdings. Benefits that accrue to cross listed
companies include:
• Access to a wider capital base across the
region;
• A regional presence, resulting in a wider
acceptance and recognition of the
company brand across the region by
company stakeholder- shareholders,
employees, customers and regulators
• The prestige of a regional listing.
December 18th 2006: Listing of Eveready East
Africa (IPO)
Eveready, regional battery maker offered 63 million
shares to the public at an IPO price of Kshs 9.50 per
share. This issue raised Kshs 556.8 million.
December 24th 2006: CSR- NSE Christmas Tree
Fund
As part of NSE’s Corporate Social Responsility, NSE
launched a Christmas Tree Fund on December 24th
2006 to raise funds to help the most unfortunate in
our society. Contributors to this kitty include
members of NSE, listed company and friends to NSE
January 29th 2007: Additional listing of 92 m
Mumias shares
Offer for sale of 91,999,220 shares in mumias for the
Government of Kenya commenced trading on this
date. Following this offer, the government of Kenya
shareholding reduced by 18% to 20% (from 34%) in
Mumias sugar company. Through this issue, the
government raised Kshs 4.5 billion.
February 16 2007: Re-launch of NSE Website
NSE upgraded its website to enhance easy and faster
access of accurate, factual and timely trading
information. Also the upgraded website will be used
to boost data vending business. The Minister of
Finance, Hon. Amos Kimunya officiated the
ceremony.
June 4 2007: Listing of Access Kenya Group
199,885,578 shares of Access Kenya Group Ltd were
listed. A total of Kshs 800 million was raised from this
IPO.
July 20, 2007: NSE reviews Index
NSE revewed THE Index and announced the folwing
companies that constitute the NSE Share Index.
1. ICDC Investment Company
2. Kenya Electricity Generating Company
3. Mumias Sugar Company
4. Rea Vipingo Plantations Ltd.
5. CMC Holdings
6. Express Ltd.
7. Nation Media Group
8. Sasini Ltd.
9. Kenya Airways
10. TPS Eastern Africa
11. Barclays Bank (K) Ltd.
12. Diamond Trust Bank (K) Ltd.
13. Kenya Commercial Bank
14. Standard Chartered Bank (K) Ltd..
15. Bamburi Cement Ltd.
16. British American Tobacco Ltd
17. East African Breweries Ltd.
18. Sameer Africa
19. Kenya Power & Lighting Company
20. Total (K) Ltd.
The review of the NSE 20-share index is aimed at
ensuring it is a true barometer of the market. The
20-share index was last reviewed on 19 May 2003
when NIC replaced East African Packaging
27th August 2007: listing of Kenya Re’
600 million shares of Kenya Re’ were officially listed.
The offer was oversubscribed by 405%.
18th October 2007: RENAISSANCE CAPITAL
Joins NSE as a member. It took over the seat of
Francis Thuo (which was under receivership).
December 14th 2007, NSE ceased Centralized floor
based trading.
December 17th 2007, NSE officially implements
Wide Area Network (WAN) - remote trading plat
form. In this system, brokers and investment banks
trade through terminals in their offices linked to NSE
trading engine. The implementation of WAN is
envisaged to boost NSE’s efficiency and engance
volumes, as trading hours were extended from 9.00
a.m to 3.00 pm, in every trading day.
June 26 2008,
CHANGES TO THE NSE 20 SHARE INDEX AND ALL
SHARES INDEX (NASI)
NASI (All Share Index)
1. Safaricom Limited has been included
Though the regulations governing the NSE 20 Share Index
require a company to have been trading for a minimum of
one year prior to inclusion in the index, the Board of
Directors of the Nairobi Stock Exchange (NSE) have made
an exception for Safaricom Limited. This is in light of the
significant impact it has occasioned on market capitalisation
and trading activity at the bourse. Mr. Mbaru says,
“Safaricom Limited’s inclusion will enhance the technical and
market reflection accuracy of the NSE 20 Share Index.”
All the above changes have been endorsed by the NSE
Board after due regard was paid to factors of market
capitalisation, turnover, shares traded and the liquidity of
the respective counters. Further, the changes pay heed to
ensuring a fair sectoral representation.
February 25th 2006, NSE introduces NSE ALL Share
Index (NASI). The NASI is a comprehensive and
complementary index designed to represent
investors’ expectations of the future performance of
all listed companies. NASI’s calculation is based on
market capitalization, implying that the index level
will reflect the total market value of the constituent
stocks. The base year for NASI 01ST January
2008=100.
April 16 2008, NSE launched NSE Smart Youth
Investment Challenge to promote stock market
investments among Kenyan Youths. NSE partnered
with Smart Youth Investment Ltd. (SYI) and it was a
key sponsor, contributing Kshs 1.0 million.
The objective of the challenge is (i) Edutainment –
education and entertainment”, to occupy the minds
of the youth positively and draw them away from the
negative energy created by the current political,
economic and social situation in the country; (ii)
encourage the culture of thrift and saving funds
amongst the university students; (iii) encourage the
youth to invest their savings in the capital markets.
June 9 2008 – official listing of Safaricom Ltd,
A total of 50 billion shares were listed. The
Government of Kenya sold to the public 25 %( 10
billion shares) of it shareholding to the public at a
price of Kshs 5.00 each. Through this IPO, the
government realized Kshs 50 billion. The IPO was
oversubscribed by 532% attracting Sh286 billion
from local and foreign investors.
June 26 2008,
CHANGES TO THE NSE 20 SHARE INDEX AND
ALL SHARES INDEX (NASI)
The Chairman of the Nairobi Stock Exchange (NSE),
Jimnah Mbaru, together with the Board of Directors,
in line with international best practice and the
quarterly review of the Exchange’s indices (NSE 20
share and NASI), is implementing the following
changes, effective 1st July 2008.
NSE 20 SHARE INDEX
1. Equity Bank replaces Diamond Trust
Bank in the Finance and Investment Sector
2. East African Cables replaces Sameer
Limited and Athi River Mining replaces
Total Kenya in the Industrial and Allied
Sector
3. Safaricom Limited has replaced TPS
Serena in the Commercial and Services
Sector
ANNEXE 1: NSE MARKET SEGMENTS
NSE has the following Three market Segments
1. Main Investments Market Segment (MIMS)
2. Alternative Investments Market Segment (AIMS)
3. Fixed Income Securities Market Segment (FISMS)
Listing Requirements:
1. MAIN INVESTMENTS MARKET SEGMENT (MIMS)
The Minimum Eligibility Conditions and Listing Requirements for the Main Investment Market Segment
(MIMS) are:
1. Company to be listed must be a company limited by shares and registered under the Companies Act (Cap 486) as a
public limited company.
2. Company must have a minimum authorized, issued and fully paid up share capital of Kshs 50 million and net assets of
Kshs 100 million before the public offering of shares.
3. Shares to be listed must be freely transferable and not subject to any restrictions on marketability or pre-emptive
rights.
4. Company must have published audited and financial statements (complying with international accounting standards) for
an accounting period ending on a date not more than 3 months prior to the proposed date of the offer.
5. If more than 3 months will have elapsed since the end of the company's last accounting period for which audited
financial statements have been prepared and the proposed offer date, then the company must prepare a set of unaudited
interim financial statements for the period following the end of the financial period.
6. The un-audited interim financial statements should not however exceed 6 months, unless the issuer is already listed in
any market segment. In this regard unlisted issuers who have published accounts exceeding a period of 6 months will
have to carry out an interim audit for the period, or plan the date of offer to immediately follow the completion of the
next annual audit.
7. Company must have prepared financial statements for the latest accounting period on a going concern basis and
audited report must not contain any emphasis of matter or qualification in this regard.
8. At the date of application, the company must not be in breach of any of its loan covenants particularly in regard to the
maximum debt capacity.
9. As at the date of the application and for a period of at least 2 years prior to the date of the application, Directors of the
issuer must not have:
any petition under bankruptcy laws filed against him/her (for individuals), or any winding-up petition pending or
threatened against it (for body corporate);
any criminal proceedings in which he/she was convicted of fraud or any criminal offence, nor be named subject of
pending criminal proceeding against him/her (for individuals), or any offence or action either within or outside Kenya
(for body corporate);
been the subject of any ruling of a court of competent jurisdiction or any governmental body, that permanently or
temporarily prohibits him or her from acting as an investment adviser or as a director or employee or a broker or
dealer, director or employee of any financial institution or engaging in any type of business practice or activity.
10. Company to be listed must have declared positive profits after tax attributable to shareholders in at least three of the
last. five completed accounting periods to the date of the offer.
11. Companies wishing to be listed should be solvent and the auditors report must be unqualified.
15
2. ALTERNATIVE INVESTMENTS MARKET SEGMENT (AIMS)
The Minimum Eligibility Conditions and Listing Requirements for the Alternative Investment Market
Segment (AIMS) are:
1. Company seeking listing must be incorporated or registered as a public limited company under the Companies Act
(Cap 486).
2. Company to be listed must also be a company limited by shares.
3. Company must have a minimum authorized, issued and fully paid up shares of Kshs 20 million and net assets of Kshs
20 million before seeking listing.
4. The shares to be listed must be freely transferable and not subject to any restriction on their marketability or preemptive
rights.
5. At the date of application, the company must not be in breach of any of its loan covenants particularly in regard to
the maximum debt capacity.
6. As at the date of the application and for a period of at least 2 years prior to the date of the application, Directors of
the issuer must not have:
any petition under bankruptcy laws filed against him/her (for individuals), or any winding-up petition pending or
threatened against it (for body corporate);
any criminal proceedings in which he/she was convicted of fraud or any criminal offence, nor be named subject of
pending criminal proceeding against him/her (for individuals), or any offence or action either within or outside Kenya
(for body corporate);
been the subject of any ruling of a court of competent jurisdiction or any governmental body, that permanently or
temporarily prohibits him or her from acting as an investment adviser or as a director or employee or a broker or
dealer, director or employee of any financial institution or engaging in any type of business practice or activity.
7. Company shall not be eligible to list unless:
(i) It has a minimum of 25 investors;
(ii) At least 20% of the paid up capital after listing, excluding any holding by the employees or family
members, is held by not less than the prescribed minimum number of investors; and
(iii) No investor shall hold more than 3% of the shares in (ii) above.
8. Company must have been in existence in the same line of business for a minimum of 2 years with good growth
potential in order to provide a comparative and reliable track record.
9. A subsidiary whose parent company has a five year track record may list, provided that the subsidiary has an
operating track record of at least one year.
10. The accounts of the company must not be older than 4 months before the listing and must be audited.
11. Company must be solvent and the auditors report must be unqualified.
12. Company must have suitably qualified senior management with relevant experience, for at least one year prior to the
application for listing, none of whom shall have committed any serious offence that may be considered inappropriate
for the management of a listed company.
13. Company may not use the proceeds of a public issue to redeem any loans by the directors or the shareholders prior
to the listing.
14. Company must ensure that the existing shareholders, related persons or such other group of controlling shareholders
who have influence over management, undertake not to sell their shareholding, before the expiry of a period of 24
months following listing.
15. Company must have at least two non-executive and independent directors on its board of directors.
16. Company must disclose a clear policy on dividends.
17. Company listed on AIMS may only change from this segment after a minimum of one year and on satisfying, the
requirements for Main Investments Market Segment.
18. All companies seeking listing in MIMS shall have their information memoranda or prospectuses approved by the
Capital Markets Authority.
16
3. FIXED INCOME SECURITIES MARKET SEGMENT (FISMS)
Eligibility conditions and listing requirements for Fixed Income Securities Market Segment (FISMS)
Companies intending to list their commercial papers or corporate bonds in the Fixed Income Securities Market Segment
must satisfy the following eligibility requirements:
1. Company to be listed must be a company limited by shares and registered under the Companies Act
(Cap 486).
2. The company must have a minimum authorized, issued and fully paid up share capital of Kshs 50 million and net
assets of Kshs 100 million before the public offering of the securities. In the event that the issuer does not have net
assets of Kshs 100 million, the issuer must obtain from a bank or any other approved institution a financial
Guarantee to support the issue.
3. The securities to be listed must be freely transferable and not subject to any restrictions on marketability or preemption
rights.
4. The company must have published audited financial statements complying with International Accounting Standards
for an accounting period ending on a date not more than 3 months prior to the proposed date of the offer.
5. If more than 3 months will have elapsed since the end of the company's last accounting period for which audited
financial statements have been prepared and the proposed offer date, then the company must prepare a set of
unaudited interim financial statements for the period following the end of the financial period
6. The unaudited interim financial statements should not however exceed 6 months, unless the issuer is already listed
in any market segment. In this regard, unlisted issuers with published accounts exceeding a period of 6 months will
have to carry out an interim audit for the period, or plan the date of offer to immediately follow completion of the
next annual audit.
7. The company must have prepared financial statements for the latest accounting period on a going concern basis and
audit report must not contain any emphasis of matter or qualification in this regard
8. At the date of the application, the company must not be in breach of any of its loan covenants particularly in regard
to the maximum debt capacity
9. The company should have made profits in at least two of the last three years preceding the issue of the commercial
paper or the corporate bond.
10. Companies wishing to issue or list debt securities should not be insolvent.
11. Total indebtedness of the issuer, including the new issue of the commercial paper or the corporate bond shall not
exceed 400% of the company's net worth (or a gearing ratio of 4: 1) as at the date of the latest balance sheet.
12. The ratio of funds generated from operations to total debt for the three trading periods preceding the issue shall be
maintained at a weighted average of 40% or more. These requirements of solvency and adequacy of working
capital will apply both to the issuer on its own and to the group.
13. The conditions as provided in paragraphs 12 and 13 must be maintained as long as the commercial paper or
corporate bond remains outstanding.
14. The directors and senior management of an applicant must have collectively appropriate expertise and experience
for the management of the groups business. Details of such expertise must be disclosed in the issue information
memorandum.
15. The applicant must ensure that each director is free of any conflict of interest between the duties he/she owes to the
company and his/her private interest
16. If the issuer is a banking or an insurance company, the company must obtain a clean certificate from the relevant
regulatory authority.
17. Where there is a guarantor and in the event that the guarantor is a bank or an insurance company licensed to
operate in Kenya, the consent [except where the guarantor is an offshore bank or insurance company not subject to
regulation of the CBK or Commissioner of Insurance] of the CBK or the Commissioner of Insurance as the case may
be, will be required.
18. Where there is a guarantor, he will provide the Capital Markets Authority with a financial capability statement dully
certified by its auditors.
19. Where there is a guarantor, he will provide the CMA with a financial capability statement dully certified by its
auditors.
20. Companies seeking listing in MIMS shall have their information memoranda or prospectuses approved by the Capital
Markets Authority.
17
POLICY AND TAX INCENTIVES FOR THE CAPITAL MARKETS
• The legal costs and other incidental costs
relating to the introduction of shares (when
a company lists its share without raising
capital) is corporate tax deductible. (2006)
• Interest income generated from the cash
flows passed to the investors who buy listed
bonds as asset backed securities for the
purposes of developing the infrastructure,
has been exempted from both withholding
and income tax (2006)
• Interest income accruing to all listed bonds
used to raise funds for infrastructure and
social services, which have a maturity of at
least three years, is exempt from withholding
and income tax (2006)
• As an incentive to encourage more investors
at the Nairobi Stock Exchange, the Minister
proposed that newly listed companies pay
corporation tax at a lower rate of 20%, for a
period of 5 years, provided these companies
offer at least 40% of their shares to the
Kenyan public (2005)
• Securitization based on bankable assets and
ability to generate cash has become a viable
alternative in most emerging markets,
particularly for institutions providing
infrastructural services to raise long term
capital. In this regard, the Minister proposed
to exempt investment income of Special
Purpose Vehicles (SPVs) from income tax.
This is to encourage institutions providing
infrastructural services to set up SPVs for
purposes of issuing asset backed securities.
(2005)
• Foreign investors can now acquire shares
freely in the stock market subject to a
minimum reserved ratio of 25% for domestic
investors in each listed company. (2002)
• Investment ceiling by retirement benefits
schemes in fixed income securities (e.g.
bonds and commercial papers) has been
raised from 15% to 30%. (2002)
• To encourage savings, collective investment
schemes set up by employers on behalf of
employees to invest in listed shares, will be
exempted from income tax. (2002)
• Effective 1 January 2003, newly listed
companies are to pay a lower corporation
tax of 25% (i.e. 5 percentage points lower
than the standard corporation tax of 30%)
for a period of 5 years following their listing.
The new legislation applies to companies
with who float at least 30% of their issued
share capital to the public. (2002)
• New and expanded share capital by listed
companies or those seeking listing exempt
from stamp duty (2000/2001)
• Transfers of assets involved in the issuance
of asset-backed securities will to be exempt
from stamp duty (2000/2001)
• Newly listed companies to be taxed at a
lower rate of 27% as compared to the
standard rate of 30% for a period of three
years following the date of listing. This is
also dependent on such companies offering
at least 20% of the share capital to the
public (2001)
• Companies that apply and are listed shall get
a tax amnesty on their past omitted income,
provided they make a full disclosure of their
assets and liabilities and undertake to pay all
their future due taxes (2001)
• Income accruing to registered collective
investment schemes tax-free (1999)
• Licensed dealers to enjoy tax benefits, as
long as they turn their portfolios within 24
months and according to laid down
guidelines (1999)
• To encourage the transfer of technology and
skills, foreign investors allowed to acquire up
to 49% of local brokerage firms; and up to
70% of local fund management companies
(1999)
• Investments by Insurance companies on
listed securities exempted from tax arising
out of capital gains on sale of shares
(1996/97)
• Expenses incurred by companies in having
their financial instruments rated by an
independent rating agency are tax
deductible. (1997/98)
• Registered venture capital funds have been
accorded major tax incentives including tax
holidays of up to ten years on the funds
income (1997/98)
• Policy decision to facilitate the participation
of foreign investors in listed securities
subject to a maximum of 40% of the share
capital in aggregate and 5% for individual
investors, or such higher amount held by
foreign investors at the time of promulgation
of the regulation (1995/96)
• Reduction of withholding tax applicable to
dividend income arising from investment on
listed securities for both local and foreign
investors. Foreign 10%; Local 10% to7.5%
to 5%. (1995/96/97)
• Exemption of stamp duty and value added
tax on the transfer of listed securities
(1995)
• Costs of IPOs were made tax deductible
(1995)
• 35% Capital Gains Tax was introduced in
1975 (suspended since 1985)
18
Capital Raising in the Capital Markets
Table 1: Initial Public Offers, 1990 to date
Year Company Subscription rate (%) Amount raised (Kshs.)
1990 KCB 147 297,000,000
1991 KFC 110 40,800,000
1992 UCHUMI 103.20 232,000,000
1992 CROWN BERGER 104 138,000,000
1992 HFCK 400 126,000,000
1993 E A OXYGEN 100 42,400,000
1993 CMC 100 20,000,000
1994 FIRESTONE 101 1,420,000,000
1994 NBK 300 400,000,000
1994 NIC 77 718,000,000
1995 REA VIPINGO* 100 102,000,000
1996 REA VIPINGO 216 84,000,000
1996 KQ 194.60 2,664,000,000
1996 NBK 275 600,000,000
1996 KCB 150 560,000,000
1997 TPS 400 167,609,000
1997 ARM 250 281,750,000
1998 KCB 1,823,250,000
1999 HFCK < 100
2000 AFRICAN LAKES 150 378,000,000
2001 MUMIAS 60 1,125,000,000
2001 ICDCI 64 331,208,164
2006 KenGen 333 7,800,000,000
Scan Group 721,000,000
Equity Bank 0
Eveready East Africa 556,800,000
2007 Kenya Re’ 405 2,280,000,000
AccessKenya Group 800,000,000
Mumias ( offer for sale) 4,500,000,00
2008 Safaricom Ltd 532 50,000,000,000
Total amount raised 78,208,817,164
19
Table: Rights Issues 1989 – 2008
Year Company Rate Amount Raised (Kshs)
1989 Barclays 88,000,000
1990 ICDCI 70,966,196
1993 Marshalls 21,475,475
1994 KFC 1:3 44,875,000
1996 E A Portland 4:1 1,008,000,000
1997 EABL 1,488,275,775
1998 ICDCI 1:3 282,584,280
2000 UNGA 02:11 103,627,070
2000 Pan Africa Insurance 516,000,000
2001 Kenya Orchards 37:2 36,000,000
2001 Standard Newspapers 6:1 306,080,775
2001 Total Company 2:3 1,275,086,508
2003 Express Kenya 1:8 178,004,216
2004 KCB 1:3 2,748,026,872
2005 Uchumi Supermarkets 2:1 1,269,469,056
2005 CFC Bank 700,000,000
2006 Diamond Trust Bank 776,550,000
2007 Olympia Capital 3:1 420,000,000
NIC Bank 1:5 1,000,000,000
Diamond Trust Bank 1:6 4,500,000,000
2008 Housing Finance 1:1 To be announced
KCB 1:9 To be announced
TOTAL RAISED 16,833,021,22
20
LIST OF MEMBER FIRMS OF THE NAIROBI STOCK EXCHANGE
Drummond Investment Bank Limited
Hughes Building, 2nd floor,
P.O. Box 45465 00100
Nairobi.
Tel: 318690/318689
Fax.2223061
E-mail: info@drummond.co.ke
Web: www.drummond.co.ke
Dyer & Blair Investment Bank Ltd
Loita House, 10th floor,
P.O. Box 45396 00100
Nairobi
Tel. 3240000/2227803/4/5
Fax.2218633
E-mail: shares@dyerandblair.com
Web: www.dyerandblair.com
Ngenye Kariuki & Co. Ltd.
Corner House, 8th floor,
P. O. Box 12185-00400
Nairobi
Tel.224333/2220052/2220141
Fax.2217199/241825
E-mail: ngenyekari@wananchi.com
Web: www.ngenyestockbrokers.co.ke
Suntra Investment Bank Ltd
Nation Centre,10th Floor,
P.O. Box 74016-00200
Nairobi
Tel. 2870000/247530/2223330/2211846
0724- 257024, 0733-222216
Fax.2224327
E-mail: info@suntra.co.ke
Web: www.suntra.co.ke
Reliable Securities Ltd.
IPS Building, 6th Floor
P. O. Box 50338- 00200
Nairobi
Tel.241350/4/79
Fax.241392
E-mail: info@reliablesecurities.co.ke
CFC Financial Services
CFC Centre, Chiromo Rd
P.O. Box 47198 – 00100
Nairobi
Tel:3638900
Fax.3752950
E-mail: cfcfs@cfcgroup.co.ke.
Web: www.cfcbank.co.ke
Bob Mathews Stockbrokers Ltd
Nginyo Towers,3rd floor
P.O. Box 73253 – 00200
Tel 311898/313492/310540
Fax:2210279 Telefax: 341867
Cell: 0724-957345/0733-371629
E-Mail: bobmathews@bobmathewstocks.com
Website: www.bobmathewstocks.com
Afrika Investment Bank Ltd
Finance House, 9th Floor
P.O. Box 11019-00100
Nairobi
Tel: 2210178/2212989
Fax: 2210500
E-mail: info@afrikainvestmentbank.com
Website: www.afrikainvestmentbank.com
ABC Capital Ltd
IPS Building, 5th floor
P.O. Box 34137-00100
Nairobi
Tel: 246036/245971
Fax: 245971
E-mail: crossfield@wananchi.com
Sterling Investment Bank Ltd
Finance House, 11th Floor
P.O. Box 45080- 00100
Nairobi
Tel.2213914/244077/
0723153219/0734219146
Fax.2218261
E-mail: info@sterlingstocks.com
Web: www.sterlingstocks.com
ApexAfrica Investment Bank Ltd
Rehani House, 4th Floor
P.O. Box 43676- 00100
Nairobi
Tel: 242170/2220517
Fax: 2215554
E-mail: invest@apexafrica.com
Web: www.apexafrica.com
Faida Investment Bank Ltd.
Windsor House, 1st floor,
P. O. Box 45236-00100
Nairobi
Tel.243811/2/3
Fax.243814
E-mail: info@faidastocks.com
Web:www.faidastocks.com
NIC Capital Securities Ltd.
Kimathi House, 1st Floor
P.O. Box 63046-00200
Nairobi
Tel.2016482/3 244272/9
Mobile: 0724-951703
Fax.244280
E-mail: invest@nic-capital.com
Standard Investment Bank Ltd
ICEA Building, 16th floor,
P. O. Box 13714- 00800
Nairobi
Tel.2228963/2228967/2228969
Fax.240297
E-mail: info@standardstocks.com
Kestrel Capital (EA) Limited
ICEA Building, 5th floor,
P.O. Box 40005-00100
Nairobi
Tel2.251758/2251893,2251815,2250082
Fax.243264
E-mail:info@kestrelcapital.com
Web: www.kestrelcapital.com
Discount Securities Ltd.
International House, 4th floor,
P O Box 42489-00100
Nairobi
Tel. 2219552/38, 2773000
Fax. 2230987
E-mail: discount@dsl.co.ke
Web: www.dsl.co.ke
African Alliance Kenya Securities.
Ground Floor, Kenya Re Towers, Upper Hill
P.O. Box 27639 - 00506
Nairobi
Tel. 2735013/2735154/2735138/2710978
Fax. 2710247
E-mail: info@africanalliance.co.ke
Web: www.africanalliance.com
Renaissance Capital (Kenya) Ltd
Purshottam Place ,6th Floor
Westland , Chiromo Road
P.O BOX 40560-00100
Nairobi
Tel 3682000/3754422
Fax: 3632339
www.rencap.com
Genghis Capital Ltd.
Prudential Building, 5th Floor
P.O Box 1670-00100
Nairobi
Tel: 2337535/36
Fax: 246334
Email: info@gencap.co.ke
21
BUSINES DEVELOPMENT DEPARTMENT
THE NAIROBI STOCK EXCHANGE
NATION CENTRE 1ST FLOOR
Tel: +254 (020), 2831000
Fax +254 (020) 224200
For more info: www.nse.co.ke
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