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Failure to review the minimum wage at Labour Day fete will disappoint workforce, but please employers

Mixed fo≥tunes fo≥ Kenyanwo≥ke≥s unde≥ Jubilee ≥ule

Pallbearers from the Kenya Defence Forces carry the casket bearing the remains of former First Lady Lucy Muthoni Kibaki at the Jomo Kenyatta International Airport yesterday morning. Mama Lucy died at London’s Bupa Cromwell Hospital last Tuesday.See also page 2JOAN PERERUAN

FINAL JOURNEYNAIROBI

Ideas & DebateAllow culture, food display on streets to create employmentPage 9

Radar ScreenSolar panels power business surge

Page 3

LifeCareer lessons no one will teach you at universityPage 27

MCAs’ sitting allowances drop for the first timeSitting allowances paid to Members of County Assemblies (MCAs) dropped for the first time since the representatives took office, data from the Controller of Budget shows.y body. Page 5»

Billionaire sues law firm in row over prime plotBillionaire businessman Peter Muthoka has secured a court order freezing millions of shillings paid in a contested land deal that has sucked in Nairobi’s top law firms..Page 6»

Leapfrog to inject Sh1.1bn more into Resolution Resolution Insurance is set to raise Sh2.5 billion in a series of transactions that will see new investors join private equity firm Leapfrog Investments in the list of the company’s shareholders.Page 7»

StanChart stock slides at NSE as it goes ex-dividendStandard Chartered has lost nearly a quarter of its value at the Nairobi Securities Exchange (NSE) since the closure of its books for bonus and dividend issues..Page 19»

BRIEFING

NEWS INDEPTH

Focus on court ruling over sale of troubled Karuturi Pages 16-17 »

BY VICTOR JUMA

Kenyan workers yesterday got no ad-justment on minimum wages from the Jubilee administration under which they have had mixed fortunes of aver-age wage growth and stagnation in the past three years.

The Presidential speech read by La-bour secretary Phyllis Kandie during yesterday’s Labour Day celebrations at Uhuru Park in Nairobi didn’t men-

tion wage increase, leaving the formal sector workers’ average earnings static. With the average inflation rate stand-ing at 5.27 per cent, this means there will be no change in their purchasing power.

Inflation-adjusted average wages per worker in the formal sector re-mained unchanged at Sh30,862 per month in 2014, according to the latest official data -- leav-ing workers with WORKERS, Page 4»

Average pay rise in formal private sector

Pay rise (%)

Inflation (%)

2011 9.3 14

2012 5.1 9.4

2013 12.1 5.7

2014 0.12 6.9SOURCE: ECONOMIC SURVEY

South Sudanasks Nai≥obicou≥t to f≥eef≥ozen fundsBY BRIAN WASUNA

Troubled South Sudanese government wants the Kenyan High Court to reverse an order it issued attaching a bank ac-count it has with CFC Stanbic Bank, ar-guing that the $18 million (Sh1.8 billion) in the account is part of the country’s emergency operation fund.

The Juba-based government says in court documents that the funds in CFC Stanbic had been earmarked for easing the economic and political challenges currently facing the country, and that Khartoum firm Active Partners Group’s (APG) decision to attach the account has stalled its operations.

APG attached the account to recov-er $41.9 million (Sh4.2 billion) Kenyan courts awarded the Khartoum firm as compensation for a botched power project South Sudan had contracted it to undertake.

An arbitration panel awarded the Khartoum firm the huge amount in January last year, paving the way for APG move to the commercial division of the High Court in Nairobi to enforce the award.

APG filed the enforcement suit in Nairobi’s Milimani Court because the arbitration was done in Nairobi, giving the Kenyan courts jurisdiction over the matter. “To date, South Sudan continues to experience FUNDS, Page 4»

2 BUSINESS DAILY | Monday May 2, 2016

Monday, May 2, 2016

No trading at bourse as world marks Labour Day There will be no trading at the Nairobi Securities Exchange as Kenya joins the rest of the world in celebrating the International Labour Day.Workers will be anxious to know if the government will review the minimum wage. Last year, President Uhuru Kenyatta raised the minimum wage by 12 per cent.The Trade Unions Congress of Kenya has asked its members to boycott the celebrations, arguing that the government pronouncement only benefit informal workers. Public sector employees usually have to rely on collective bargaining agreements to have salary increments.

Tuesday, May 3

Statistics agency set to release Economic Survey The Kenya National Bureau of

Statistics (KNBS) will launch the annual economic performance report. The Economic Survey outlines the performance of various sectors of the economy with emphasis on the year 2015 turned out in terms of which areas flourished and those that contracted, giving policy makers a hint on where to focus.The statistics presented in The Economic Survey are based on a wide variety of sources and present the socio-economic highlights of the economy for the last five years.

Schools reopen for the second termSchools across the country will start re-opening for the second term following a month-long break after the end of first term of the academic calendar from January to end March. Retail outlets, bookshops and school uniform shops are expected to record booming business.However, it is likely to be a difficult start for the learners going by the heavy rains pounding the country,

causing floods and hindering transport and communication.

KCB closes share register ahead of dividend awardsListed lender and Kenya’s most profitable commercial bank will be closing its shareholders register for a cash and scrip dividend.The bank will be paying a dividend of Sh2 per share split into half as a cash payment and half in the form of shares, known as a scrip dividend. Scrip dividend allows the bank, which also plans a rights issue, to boost its core capital.The conversion price of the new shares to be issued under the scrip offer has been determined as Sh38 each.KCB shareholders have the option of taking the dividend in cash or taking the scrip offer.The bank posted an after-tax profit of Sh19.6 billion for the year ended December up from Sh16.8 billion the previous year.

Wednesday, May 4

Financial tech vendors and innovators at Nairobi talks Dot Finance Africa, the conference which brings together financial services executives, technology vendors, innovators and thought leaders will start in Nairobi. Dot Finance Africa aims to serve as a catalyst for collaboration between African banks and global innovators.Hosting of the event cements Kenya’s position as the top financial hub in East Africa.

I&M Holdings closes its books for dividend payoutI & M Holdings will be closing its books for a Sh3.50 per share dividend payout. The listed lender posted a Sh5.8 billion after-tax profit last year up from Sh5.6 billion in 2014.I & M is currently in the process of acquiring small lender Giro Bank with the transaction expected to close by end of next month.

What is making news this week

TOP NEWS

Mama Lucy Muthoni Kibaki begins final jou≥ney

President Uhuru Kenyatta, Deputy President William Ruto and First Lady Margaret Kenyatta after the arrival of the remains of former First Lady Lucy Kibaki at the JKIA yesterday morning. JOAN PERERUAN

1940-2016

The coffin bearing the remains of former First Lady Lucy Kibaki is of-floaded from an aero-plane at JKIA yesterday on arrival from London.JOAN PERERUAN

Military pallbearers carry the casket bearing the remains of former First Lady Lucy Kibaki to a waiting hearse at the JKIA yesterday morning. JOAN PERERUAN.

Father Dominic Wamugunda blesses the coffin bearing the remains of former First Lady Lucy Muthoni Kibaki after mass at the Jomo Kenyatta International Airport in Nairobi yesterday morning. JOAN PERERUAN

Former President Mwai Kibaki with family members at the Lee Funeral Home yesterday where the remains of former First Lady Lucy Kibaki were taken after arriving in the country from London. WILLIAM OERI

Military pallbearers pay their respects after car-rying the casket bearing the remains of former First Lady Lucy Kibaki at the Jomo Kenyatta International Airport in Nairobi yesterday morn-ing. PSCU

Former President Mwai Kibaki at the Lee Funeral Home in Nairobi yesterday shortly after the remains of former First Lady Lucy Kibaki were taken there.WILLIAM OERI

3Monday May 2, 2016 | BUSINESS DAILY

Samwel Nyakalege’s life has re-cently become more of a grind – and that’s a good thing.

The 33-year-old miller from Bwisya village, on Lake Victoria’s Ukara Island, Tanzania, is one of the first to benefit from a project to bring solar power to residents and business-owners.

The entrepreneur, married with four children, has worked grinding millet, maize, rice and beans since 2007, but the high cost of fuel for his diesel generator made it hard to turn a profit.

“I used to buy a litre of diesel for up to 3,000 Tanza-nian shillings (about $1.40) and I needed at least 50 lit-ers every week to run the generator. My business could hardly grow,” Nyaka-lege told the Thomson Reu-ters Foundation.

But with the arrival of the first-ever solar-pow-ered mini-grid at Bwisya, launched by JUMEME, a rural power supply company with government backing, Nyakalege has enough energy to run his power-hungry business – and no longer needs costly and polluting generators.

Cheaper power, in fact, means that he can expand his company.

“Solar power is a blessing to us as we can now serve more customers quicker and efficiently,” he said. “I don’t spend a penny to buy diesel. My motors work very efficiently using solar electricity.”

Around the world, as the costs of solar energy plunge, it is increasing-ly being used to power industry and businesses, a huge step forward from simply supplying lighting and basic electrical power in places like Tanza-nia, experts say.

Nyakalege, for instance, now uses solar power to operate his three mill-ing machines simultaneously. He has

employed three people to help him and has seen his customer base rise to 600 a day.

His income also has grown as a re-sult, from less than 100,000 shillings a day on average (about $45) to 400,000 shillings now.

He is now contemplating getting a bank loan to expand his business, he said.

Processing grain in Ukara, until recently, was a costly activity because of the island was not connected to the

electrical grid. Those who couldn’t afford die-sel-powered grain-mill-ing services often had to grind their staple foods of cassava and maize by hand, a time-consuming activity.

The solar system at Bwisya is part of a project to provide reliable and af-fordable electricity to the nearly 2,000 households

and more than 200 businesses on Ukara, in order to boost opportunities to earn an income.

It is the first of 30 such systems JUMEME plans to install over the next two years. They are expected to supply power to around 100,000 people, company officials said. The company has even bigger plans for the longer-term, they said. “Our goal is to set up 300 systems and serve up to one million people in rural areas across Tanzania by 2022, making JUMEME the largest mini-grid operator in the country,” said Thadeus Mkamwa, one of the compa-ny’s directors.

The project, jointly funded by the European Union and private investors with political support from the Tanza-nian government , has a total budget of 38.4 billion shillings ($17.6 million), Mkwama said.

In Bwisya, the largest village on Ukara, 250 customers are due to be connected to a hybrid power station consisting of a 60-kilowatt (KW) solar photovoltaic system and a 240 KW-hour battery bank. A diesel generator provides back-up. The system will be extended in the second half of this year to connect the other villages on the is-land, Mkamwa said.

The installation charges for indi-vidual homes and business are repaid by customers in installments. Consum-ers pre-pay for their power, with costs per unit depending on the amount of electrical equipment they use.

JUMEME is working with GVEP In-ternational, a nongovernmental organi-

sation, to train people on Ukara to use electricity for business purposes, such as producing wood and metal crafts.

Hamisi Bujeje, 30, has dreamed of owning a big carpentry workshop since he helped his father build canoes and dhows as a boy. But he said he has so far struggled to turn a profit in the business he started in 2011.

“My business has not been doing very well because of lack of power. I was incurring huge operational costs. I used to travel 29 km (18 miles) to the nearest island of Nansio to access elec-tricity and have some items fixed,” Bu-jeje said.

But along with cheaper solar power, he has access to new carpentry equip-

ment, business coaching from GVEP and a loan scheme offered to entrepre-neurs by JUMEME.

“I am looking forward to expanding my business and attaining my dream in the furniture industry,” Bujeje said.

Domestic customers of the new so-lar power supply are also pleased with the change.“The system is very good and so helpful,” said Kulwa Mwenguo, a resident of Ukara “I have access to lights, charge my phone and I listen to the radio.” Mwenguo says he pays 3,800 shillings ($1.70) each week for the serv-ice, less than two-thirds of what he use to spend on kerosene.

-THOMSON REUTERS FOUNDATION

TOP NEWS

Sola≥ panels powe≥ business su≥ge, not just lights ENERGY Tanzanian rural power supply company

Jumeme launches first solar-powered mini-grid

A man walks past solar panels at the Garden City Mall in Nairobi. Solar power is helping small businesses in Africa to save money on energy costs. FILE

R A D A R S C R E E N K I Z I T O M A K O Y E

Solar power is a bless-ing to us as we can now serve more customers quicker and efficiently

Malawi’s estimated 10,000 albi-nos face “extinction” if they continue to be murdered for

their body parts for use in witchcraft, a UN expert has warned.

Ikponwosa Ero said that the situa-tion “constitutes an emergency, a crisis disturbing in its proportions”.

Her call came after two men re-ceived a 17-year jail term for murdering a 21-year-old woman with albinism.

Ms Ero said Malawi police have

recorded 65 attacks, abductions and murders of albinos since the end of 2014.

Tanzania’s albino community: ‘Killed like animals’

Albinos were targeted because of be-liefs that their body parts “can increase wealth, make businesses prosper or facilitate employment”, said Ms Ero, the UN human rights council’s expert on albinism.

“Even in death, they do not rest in

peace as their remains are robbed from graveyards,” she added.

Ms Ero, herself an albino, said there are economic motivations.

“Malawi is one of the world’s poor-est countries and the sale of body parts of persons with albinism is believed to be very lucrative.”

People with albinism, who lack pig-ment in their skin and appear pale, are regularly killed in several African countries including Malawi, Mozam-

bique and Tanzania.Sorcery and the occult maintain a

strong foothold in Tanzania, especially in the remote rural areas around the fishing and mining regions of Mwanza, on the shores of Lake Victoria.

The chairman of the regional Tan-zania Albinism Society, Alfred Kapole, an Ukerewe native, was forced to flee to Mwanza city.

He was among the first person with albinism whose case reached the courts

after a village leader attempted to kill him for his hair.

Some witchdoctors in Tanzania say that potions and charms made from albino body parts are guaranteed to bring success. This has led business-men, politicians and others to pay crim-inals to kill albino people and cut off their limbs. A group of children who survived attacks, but lost arms or legs, was last year given prosthetic limbs in the US. - BBC

People with albinism in Malawi face total extinction, wa≥ns UN

4 BUSINESS DAILY | Monday May 2, 2016

no extra room for increased spending or saving.

The Kenya National Bureau of Statis-tics (KNBS) explained in the Economic Survey 2015 that the near stagnation in average wages was linked to a rise in inflation rate during the period under review, coupled with only marginal sal-ary increments.

Kenya’s cost of living rose to 6.9 per cent in 2014 from 5.7 per cent in 2013, cancelling the nominal average wage increase from Sh41,672 to Sh44,807 during the same period.

The stagnation in real wages in 2014 was in sharp contrast to 2013 –the first year of the Jubilee coali-tion’s government — when workers recorded one of the largest gains in recent years. Real average wages in 2013 jumped 11 per cent to Sh30,723 per month from Sh27,765 in 2012.

The double-digit increase was the result of 18 per cent average wage incre-ment to Sh41,672, beating the prevailing inflation rate that declined from 9.4 per cent to 5.7 per cent in the same year.

KNBS noted that the relatively weaker performance in 2014 was also driven by the government’s decision not to increase the minimum wage that year.

The statutory pay rise acts as a floor for formal sector earnings whose revision has the effect of ramping up compensation for workers in the higher rungs of the income ladder.

During last year’s Labour Day cel-ebrations, the government announced a 12 per cent increase in the minimum

wage, a move that is expected to have caused a general rise in 2015 wages when KNBS publishes data on labour market performance for that year later this month.

Workers’ unions, led by the Central Organisation of Trade Unions (Cotu), have consistently pushed for double-digit increases in the minimum wage, citing the need to protect workers from inflation.

Employers on the other hand have argued against en-trenching a culture of raising the minimum wage each year, rooting for a formula that would allow individual organi-sations to compensate employees based on productivity while also factoring in the overall

cost of doing business.The rate of inflation, which has

stayed in the single digits this year on account of lower fuel and food prices, is a powerful argument for employers rooting for zero or marginal wage in-crements.

The cost of living last month fell to a new record low of 5.27 per cent, boosting workers’ spending power and giving em-ployers an upper hand in any upcoming negotiations for wage increments.

The Jubilee government in 2013 raised the minimum wage to 14 per cent, pushing the average minimum pay in urban centres to Sh12,136 per month compared to Sh10,646 in 2012.

For workers paid above the mini-mum wage, growth in wages has pri-marily been driven by competition for

skilled talent and the growing power of unions that negotiate better terms through collective bargaining agree-ments (CBAs).

A total of 328 CBAs were registered by the Industrial Court in 2014, cover-ing 90,856 employees who were enti-tled to an average monthly basic pay of Sh32,210 and an average monthly housing allowance of Sh5,700.

That was a slight increase from the previous year when 293 CBAs covering 380,103 workers were registered giv-ing qualified beneficiaries an average monthly basic salary of Sh31,988 and an average monthly housing allowance of Sh6,700.

Workers in the retail sector have been among the biggest beneficiaries of the CBAs where the total pay of a section of workers at major stores like Tuskys and Nakumatt Holdings have topped the Sh30,000 mark.

Newly-employed cashiers at Tuskys, for instance, have seen their basic monthly pay rise to Sh26,889 from Sh24,898 following a new CBA the re-tailer signed with the Kenya Union of Commercial, Food and Allied Workers (Kucfaw) in March.

The amount will rise further to

Sh29,041 next year, according to the CBA which covers two years.

Financial services sector managers have on the other hand emerged among the top beneficiaries of talent wars where highly qualified employees are lured by larger salaries and bonuses.

This fight for top talent and the prof-itable nature of the financial sector has seen bankers, insurers, asset managers, analysts and investment advisors rank as the highest paid professionals in the private sector with an average monthly pay of Sh125,000 as of 2014.

While labour earnings look set to rise in the near term, they will only benefit workers who will remain in a labour market where retrenchments has be-come a common feature.

Kenya Fluorspar Limited and Stand-ard Chartered Bank Kenya are among the firms that have recently cut jobs in response to depressed earnings.

Kenya Revenue Authority (KRA) has attributed the fall in payroll taxes (PAYE) to a mix of retrenchments, sus-pension of salary increments and a hir-ing freeze, capturing the bleak outlook for workers.

vjuma@ke.nationmedia.com

Mixed fo≥tunes fo≥ Kenyan wo≥ke≥s unde≥ Jubilee ≥ule

TOP NEWS

Kenya’s cost of living ≥ose to 6.9 pe≥

cent in 2014 f≥om 5.7 pe≥ cent in 2013

»From Page 1

Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli with Federation of Kenya Employers (FKE) executive director Jacquline Mugo during the Labour Day celebrations at Uhuru Park in Nairobi yesterday.SALATON NJAU

severe economic hardship as it also

seeks to restore peace and stability within its borders. It is in the interest of justice that South Sudan be allowed to settle the outstanding decretal sum in monthly in-stalments in order to alleviate its current foreign exchange cash flow crisis,” says Jer-emiah Swaka Moses, the undersecretary of South Sudan’s Ministry of Justice.

The Juba government says it should be given nine months and then allowed to pay APG’s debts in instalments of $500,000 (Sh50.5 million) per month.

CfC Stanbic transferred the funds to APG’s lawyers after the firm secured orders

to attach South Sudan’s account.Justice Fred Ochieng has stopped APG’s

advocates from transferring the money until he has heard South Sudan’s application.

APG’s lawyer Gilbert Mungu, however, says that South Sudan has previously duped them into accepting instalment payments, and that the Juba government used the same argument it is now making to the Nairobi court.

Mr Mungu says in his affidavit that the CfC account may have had nothing to do with emergency relief as shortly after it was frozen, he was approached by South Sudanese businessmen who tried to bribe him to have the orders lifted.

The lawyer claims that the businessmen

told him that the freeze orders had interfered with the Juba government’s plan to pay them from the CfC account.

“My office was invaded by South Suda-nese-looking persons who offered me in-ducement to have the orders lifted and told me they were expecting payments from the account for business they had done with South Sudan. I listened to them but declined their offers,” Mr Mungu says.

Arbitrators Philippe Pinsole, Karel Daele and Richard Omwela in January last year ruled that South Sudan had unlawfully cancelled the $197 million (Sh18.7 billion) tender awarded to APG for the electrification project.

The arbitrators found that South Su-

dan had breached clauses of the contract it signed with APG, which provided for a bank guarantee to secure the multi-billion shilling project.

APG managing director Mohammed Fagir says he was forced to flee Khartoum in 2009 after some of the firm’s creditors sued the firm for failing to pay for supplied equipment in-tended for the electrification project.

The firm says it spent $12.1 million in project survey, design, salaries, air charters and assorted equipment and urgently needs to be paid the money.

South Sudan blames the cancellation on civil war and a massive corruption scheme that saw several firms paid billions of dollars

for grains that were never delivered. South Su-dan holds that it was not part of a deal struck between APG and CfC to release funds in the account to the Khartoum firm’s lawyers hence the transaction should be reversed.

But APG says that South Sudan had with-drawn from the suit entirely, a move that struck it from a concerned party in the consent over its CfC account. The firm says it is only willing to accept the recompense in one or at most tranches following South Sudan’s breach of an instalment payment plan.

Justice Ochieng will mention the matter on May 5 for further directions.

bwasuna@ke.nationmedia.com

South Sudan asks Nai≥obi cou≥t to ≥elease f≥ozen funds»From Page 1

BY GEORGE OMONDI

Labour union officials yesterday clashed with employers over setting of workers’ pay even as President Uhuru Kenyatta steered clear of the annual minimum wage adjustment.

Central Organisation of Trade Un-ions (Cotu) secretary-general Francis Atwoli accused employers of hiding behind productivity to thwart unions’ bid for pay increases.

“Pay based on productivity cannot work in Kenya,” said Mr Atwoli.

“Kenya does not have a productivity centre that compiles credible data based on inflation, wages and incomes. If we go the employers’ way, this country will never get industrialised,” he said during Labour Day celebrations in Nairobi.

“This language of productivity is not valid here on in Africa. In fact, only Japan has a national productiv-ity centre.”

Employers, through their lobbies, the Federation of Kenya Employers (FKE) and the Kenya Private Sector Alliance , have been pushing for the abolishment of minimum wages and want payment for workers to be based on individual productivity.

“We cannot discuss wages without talking about productivity, ” FKE execu-tive director Jacqueline Mugo said dur-ing the celebrations.

“Kenya is lagging behind in produc-tivity yet racing ahead of other econo-mies in labour costs,” she added.

Mr Atwoli has been defensive of the minimum wages, saying it is the only way the government can protect ‘voice-less’ workers from exploitation.

Yesterday, he said the status quo should remain the same until the gov-ernment forms a centre to measure productivity.

Unions clash with employe≥s ove≥ wo≥ke≥s pay

5Monday May 2, 2016 | BUSINESS DAILY

BY KIARIE NJOROGE

Sitting allowances paid to Members of County Assem-blies (MCAs) dropped for the first time since the representa-tives took office, data from the Controller of Budget shows.

The data indicates that in the six months to December, the MCAs received Sh1.36 bil-lion, down from Sh1.44 billion in a similar period in 2014. In the first half of financial year 2013/2014, counties spent Sh1.1 bil-lion on sitting allowances for MCAs.

The 2,259 MCAs and speak-ers’ sitting allowances have been growing since 2013 and take up a huge chunk of county government revenues at the expense of development with the Controller of Budget Agnes Odhiambo calling for their re-assessment.

The continuous growth of MCAs’ sitting allowances has put them in the same league with top corporate executives and earned them negative senti-ments among Kenyans who view them as greedy individuals who seek public office for personal gain.MCAs earn sitting allow-ances for attending committee meetings as well as debates on the floor of the house.

Attempts to tame the spend-ing on MCAs have not been suc-cessful, with the representatives ignoring calls including from President Uhuru Kenyatta. The latest data now shows that on average, each of the MCAs received an average Sh100, 974 per month in the review period,

down from Sh106, 371 paid out in a similar period in 2014.

Uasin Gishu MCAs saw the biggest drop with each ward representative’s sitting allow-ance dropping from an aver-age Sh312,339 to Sh63,289 per month.Murang’a MCAs also took a shave from an average Sh121,348 to Sh47,202.

In Turkana, the MCAs sitting allowances dropped from an av-erage of Sh143,722 to Sh72,934 per month.

Siaya MCAs saw their av-erage monthly sitting allow-ances drop from Sh142,995 to Sh81,786.Kwale MCAs siting allowances earnings dropped from Sh122,558 to Sh67,191

The MCAs who earned the highest from sitting allow-ances are those from Marsabit (Sh178,635) followed by Mig-ori (Sh164,729) and Samburu (Sh163,221) per month.

LeastThe least sitting allowances were paid to MCAs of Tharaka-Nithi (Sh40,910), Murang’a (Sh47,202) and Baringo (Sh50,041) per month.

The drop will ease pressure on MCAs who have been criti-cised for pocketing millions through these generous perks while offering lacklustre service. The CoB report indicates that 12 county assemblies exceeded the Sh124,800 per month ceiling fixed by the Salaries and Remu-neration Commission (SRC) for monthly sitting allowances.

gkiarie@ke.nationmedia.com

ECONOMY & POLITICS

MCAs’ sitting allowances d≥op fo≥ the fi≥st time

PERKS Reps take home Sh1.36 billion insix months to December, down from Sh1.44 billion in a similar period in 2014

BY NEVILLE OTUKI

Inflation last month dropped to a 34-month low on lower food prices and re-duced motoring expenses as petrol prices dropped to a six-year low.

The Kenya National Bureau of Sta-tistics (KNBS) data shows that inflation

eased to 5.27 per cent in April from 6.45 per cent a month earlier, marking the lowest level since June 2013.

This is the fourth month in a row that the cost of living measure has dropped since December when it stood at 8.01 per cent.

“In totality food inflation stood at 6.84

per cent, which is the lowest, recorded in the recent past,” KNBS said in a state-ment. The prices of several food items were, however, up last month including tomatoes, Irish potatoes and spinach.

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation.

Kenya is in the long rains period, sig-nalling increased food crop yields, which could help cut prices and ease inflationary pressures on household budgets.

The energy regulator mid-April cut petrol prices to a six year low, offering private motorists a relief in transport expenses.

But the price of diesel, used for pow-ering industries, trucks and buses, in-creased marginally alongside that of kerosene, which is mostly used by low-income households for lighting and powering cook stoves. The bureau data shows that electricity prices remained un-changed for the third month in a row.

Inflation down to lowest level since 2013 on falling food p≥ices

6 BUSINESS DAILY | Monday May 2, 2016

BY KIARIE NJOROGE

Billionaire businessman Peter Muth-oka has secured a court order freezing millions of shillings paid in a contested land deal that has sucked in Nairobi’s top law firms.

Acceler Global Logistics, a firm owned by Mr Muthoka, has won a court order to freeze Sh81 million of the Sh151 million it had paid Rahil International for prime four-acre plot on Mombasa Road.

Mr Muthoka has also sued top corpo-rate law firm Coulson Harney for releas-ing the millions to Rahil International despite his firm, Acceler Global Logistics, calling for the land deal to be cancelled following questions over the real own-ers of the plot.

“The 1st defendant (Rahil Interna-tional) deposit the sum of Sh81,100,000 into a joint interest-earning account in the name of Counsel for the plaintiff (Mohammed Muigai Advocates) and the 1st defendant herein within three days,” Justice Eric Ogola ordered.

The row started with the signing of a land purchase agreement between Ac-celer Global Logistics and Rahil Inter-national Limited, which claimed owner-ship of the prime Mombasa Road land worth Sh168 million.

A deposit of Sh16.8 million or 10 per

cent of the purchase price was paid with the agreement that the lawyers would pay the balance of Sh151.2 million upon registration of the title in the name of the buyer. It was later found that the land ap-peared to have two registered titles both with differing signatures and the hand-writing on entries also differing.

Acceler Logistics was unable to take move into the property measuring 1.6 hectares after it found another party was engaging in excavation, which prompted it to issue instructions to Coulson Harney not to complete the transaction.

In a letter to Coulson Harney Advo-cates dated March 21 2016, Acceler de-manded a refund of the balance of the purchase price or Sh151.2 million and a termination of the land deal given its unclear ownership.

Coulson Harney replied the next day that it was legally bound to release the money and said the “suspicion of fraud” had been settled by the Land registry.

The High Court on March 31 issued an injunction restraining Coulson Har-ney from releasing the funds pending

the hearing and determination of the case.

Coulson Harney replied that the suit had been overtaken by events as the firm had already released the balance to the advocates of the sellers of the property.

By this time, Rahil had withdrawn half of the purchase price, which has now been frozen and put in a joint account pending the conclusion of the case.

“At the time the 1st defendant was instructed by their advocates not to deal with the funds, the account had a sum of Sh83, 116, 975,” Benjamin Tarus, a direc-tor with Rahil said in an affidavit. The other directors are David Ritho, Duncan Achar and Joseph Okoth.

The suit offers a peek into Kenya’s rickety manual land record that has been prone to manipulation.

Unsuspecting land buyers have been relying on searches of company details together with modified records at the Land ministry to acquire property and have lost hundreds of millions of shil-lings in fraudulent dealings.

gkiarie@ke.nationmedia.com

City billionai≥e sues top law fi≥m in ≥ow ove≥ p≥ime plot

DISPUTE Muthoka firm faults Coulson Harney for releasing cash against advice

Mr Richard Harney of Coulson Harney. FILE Mr Peter Muthoka. FILE

BY GEORGE OMONDI

Kenyan firms have raised the alarm over failure by East African states to honour regional deals even as the third secretary-general of the bloc assumed office last week to oversee implementation of treaties ne-gotiated more than a decade ago.

The firms represented by Kenya Asso-ciation of Manufacturers (KAM) want the East African Legislative Assembly (EALA) to craft legally binding laws to force mem-bers to implement key treaties.

Currently, the five East African Com-munity States rely on mutual trust and political goodwill to implement deals struck in Arusha such as free movement of goods and persons, access to jobs, uni-form quality standards and harmonised domestic taxes.

KAM says exchange of goods and services faces administrative barriers despite the customs union and common market protocols which Kenya has been implementing with its neighbours in the last 11 years.

“Though there have been some mile-stones, businesses in the region have and still witness a number of frustrations while trading with each other,” KAM said in an industry update released following its meeting with EALA members.

“This (delay) is mainly due to lack of honouring agreements like rules of origin, standardisation, Quality Assurance, Me-trology and Testing Act, sanitary and phy-tosanitary protocol and non-tariff barriers imposed by various regulatory authorities from various Partner States.”

The customs union protocol, negoti-ated from 2002 had an implementation timeline between January 1, 2005 and De-cember 2009. Had it been implemented fully, goods fully produced within the re-gion would not be encountering adminis-

trative barriers to sell across East Africa. Similarly, businesses face restrictions

in their bid to access land, workforce and capital across the region despite July 2010 launch of the EAC common market protocol, which was meant to eliminate such administrative controls by Decem-ber 2015.

KAM discussed a legal option with EALA members two weeks, just days be-fore Burundi’s Liberat Mfumukeko as-sumed office as the bloc’s new boss.

Mr Mfumukeko was appointed dur-ing their 17th Ordinary Summit held in February.

The EAC treaties have remained un-implemented through Mr Juma Mwa-pachu and Dr Richard Sezibera’s terms, forcing the business community to call for legal commitments rather than politi-cal promises.

PoliciesUnder the EAC treaty, the secretary-general is the secretary of the Heads of State Summit and has the duty of ensur-ing that states implement deals reached in Arusha.

“It is important to have enabling business environment and policies in EAC which will nurture investments and attract new investments, create jobs and bring prosperity for East African people,” KAM chief executive Phyllis Wakiaga said at a meeting with EALA members.

Mrs Nancy Abisai, EALA Kenya Chap-ter’s chairperson, however, wants Kenya to take a front seat in championing indus-trialisation agenda.

“Kenya needs to be at the forefront and aggressively lobby for policies that will sup-port the Kenyan industry inasmuch as this will be done in the context of the spirit of integration,” KAM quotes her as having said during last week’s meeting.

Kenyan fi≥ms push fo≥ laws fo≥cing EAC States to implement t≥eaties

BY ALLAN ODHIAMBO

A new and wider 122km fuel pipe-line between Kisumu and Sinendet is marked for commissioning by June as Kenya Pipeline Company (KPC) looks to improve product supplies in west-ern Kenya.

The latest update by the KPC said the Sh5.7billion project was more than 80 per cent complete, with the entire product pipeline already buried un-derground. “The project is bound to increase supply to western Kenya and by extension the export market of Ugan-da, Eastern DRC, Rwanda, Burundi and northern Tanzania,” KPC managing di-rector Joe Sang said.

The 10-inch pipeline is expected to increase product flow to Kisumu depot by 350,000 litres per hour and optimise tank utilisation, which currently stands at 30 per cent due to low capacity six-

inch line.“Kisumu has been experiencing prod-

uct stock-outs because the current six-inch line that supplies the area is not sufficient,” Mr Sang further said.

The new pipeline to Kisumu will boost plans by the KPC to extend its cur-rent distribution network to counties.

It has already invited bids for feasibil-ity studies for preliminary design and identification of viable depot locations in Western region, South Nyanza, South Rift, Lower Eastern and Mount Kenya.

The KPC has depots at the Nairobi terminal, Jomo Kenyatta International Airport (JKIA), Mombasa International

Airport, Kipevu, Nakuru, Kisumu and El-doret with a combined capacity of 612.33 million litres. These seven depots are linked to the main pipeline.

Thin profitsThe company in September said it plans to lease oil storage facilities from private investors in Nairobi and Mombasa to im-prove product distribution and supply. Extra storage is critical to oil marketers in the region because of thin profit mar-gins from sales. In fragmented markets such as East Africa’s, bulk supplies hold the key to profitability.

The KPC said it plans to lease opera-tional terminals in Nairobi and Mom-basa with a capacity of 30 million litres and 100 million litres, respectively. “The terminal must be fit for purpose for immediate use,” the company said as it called for bids by interested termi-nal owners.

ECONOMY & POLITICS

KPC launches Weste≥n Kenya pipeline in June

122km Length of new line running from

Kisumu to Sinendet

Oil marketers have warned of contamina-tion of fuel with water in the ongoing flood-ing that has hit Nairobi and other parts of the country.

The heavy rains experienced from Fri-day have flooded roads and cut off access to some petrol stations. In a joint statement released on Saturday, the Kenya Pipeline Company and SupplyCor Kenya Limited asked motorists to be cautious.

“All fuel depots have been advised to ex-ercise extra caution as they load and deliver fuel to petrol stations,” the joint statement reads in part. “Petrol Station dealers and operators should also exercise extra cau-tion as they receive fuel and dispense to motorists.”

The alert came as the National Transport and Safety Authority (NTSA) and Kenya Na-tional Highways Authority issued another

joint statement cautioning road users in Nairobi. The floods-prone roads include Langata Road which was nearly cut off at the T-mall junction area by raging waters. Muhoho/Popo roads junction, Ngong River crossing of Muhoho road, Lusaka Road and Baricho Road.

“Motorists should not to risk their lives by attempting to cross flooded areas, ” the statement reads in part.

Also prone to flooding are Jogoo Road near Makadara Law Courts, James Gichuru Road, Marcus Gurvey/Chania Avenue Junc-tion, Kipevu/Ushirika Road junction and Langata South Road. Other roads are Lower Kabete/Brookside Drive junction, Jakaya Kikwete Road at outlet of main drainage from Department of Defence (DoD) head-quarters and Lenana Road, especially next to the DoD gate. -GEORGE OMONDI

Oil contamination ale≥t issued

7Monday May 2, 2016 | BUSINESS DAILY

A n Express Kenya trailer. The logistics firm is now diversifying into real esate. FILE

BY CHARLES MWANIKI

Logistics firm Express Kenya will spend Sh2 billion to construct the first phase of its housing project in Nairobi’s Industrial Area as its diversification into real estate finally starts.

The firm said on Thursday that the first phase of the real estate plan that is expected to be completed in two years will see the construction of 224 residen-tial houses on 3.5 acres in four high rise blocks, with a mix of one, two and three-bedroom units.

In total, the company plans to con-struct 1,200 residential houses on the land in Industrial Area, which measures 15.75 acres

Express Kenya has been looking to diversify its business away from the mainstay logistics business, having seen a reversal in fortunes after losing the key EABL beer transport contract five years ago. “We are targeting airport staff and other workers from Mombasa road who are currently being forced to go across town to get appropriate housing. The base price for the one bedroom unit is Sh8 million, for the two bedroom Sh12.5 million, three bedroom Sh14 million and the three bedroom with a servants quarter Sh16 million,” said Express Kenya senior

manager in charge of project account-ing Jane Nungari.“We are financing the project through a mix of debt and our own internal finances, and it has also helped that we had the land which would other-wise have cost us Sh1.5 billion.”

The real estate plan was first mooted in October 2013 with ground breaking initially planned for July last year. Ms Nungari said however that legal and regulatory processes and approvals took longer than initially planned, pushing the start to this year.

The construction of the housing project will see Express Kenya join other listed firms such as Eveready Kenya and Car&General which have diversified into real estate to supplement earnings from their main business lines.

Express Kenya’s made a net loss of Sh23.27 million for the six months end-ed June 2015 compared to a profit of Sh10 million over a similar period in 2014, this after its turnover dropped to Sh60 mil-lion from Sh90.4 million between the two periods.

Eveready shut down its Nakuru battery factory in 2014 citing unfair competition from cheap imports, and proposed to put up on the 18.5 acres of land on which the factory sat either a shopping mall or a business park.

Exp≥ess b≥eaks into ≥eal estate with Sh2bn p≥oject

CORPORATE NEWSPRICES I RESULTS I DATA

BY VICTOR JUMA

Resolution Insurance is set to raise Sh2.5 billion in a series of transactions that will see new investors join private equity firm Leapfrog Investments in the list of the company’s shareholders.

Leapfrog, which acquired a 62 per cent in Resolution for Sh1.6 billion in 2014, is set to make an additional eq-uity investment of Sh1.1 billion in the company by June. Resolution’s other shareholders— chief executive Peter Nd-uati and John Mwangi— are expected to participate in subsequent transactions to raise the balance of Sh1.4 billion by December next year.

“The balance is expected in two tranches with Sh700 million by Janu-ary 2017 and Sh700 million by December 2017. This balance will be a combination of debt and equity,” Resolution said in a statement.

“The second and third tranches will have participation by additional investors.”

The fundraising plan is expected to change Resolution’s shareholding structure, with Leapfrog remaining the major shareholder.

At the time the PE firm first bought into the insurer, Mr Nduati and Mr Mwangi were the only minority inves-tors with a combined stake of nearly 40 per cent. Leapfrog’s investment of Sh1.6 billion comprised injection of new capital and a buyout of private equity firm African Development Cor-poration (38.74 per cent) and George Kahira whose ownership was not dis-closed.

The transaction came soon after

LeapFrog exited insurance holding company Apollo Investments where it sold its 26.9 per cent stake to SwissRe Direct, cashing in on the investment it made in 2011. Resolution says the ex-tra Sh2.5 billion will be used to comply with risk-based capital requirements that take effect in June. The amended Insurance Act will replace the current standard capital levels with a risk-based capital adequacy system that is expect-ed to raise the absolute capital held by some insurers.

This has prompted insurers to raise more capital, with the Insurance Reg-ulatory Authority (IRA) saying it also foresees mergers and acquisitions by underwriters to strengthen their bal-ance sheets.

The upcoming law is meant to bring stability in the sector where previous failure of several firms eroded public confidence, partly contributing to the low insurance penetration at less than five per cent.

At the moment, life insurers must

maintain a paid-up capital of at least Sh150 million while those underwriting general business must have a minimum paid-up capital of Sh300 million.

Composite insurers must have Sh450 million as the minimum paid-up capi-tal while reinsurers need Sh800 mil-lion comprising Sh300 million for life business and Sh500 million for general business.

Concord Insurance, Blue Shield, and Standard Assurance are some of the firms that have collapsed in the past decade.

Resoltion, which previously relied heavily on medical insurance target-ing the middle class and SMEs, has ex-panded into general insurance in what will raise its capital requirements under the new law.“Subsequent to LeapFrog Investments acquisition of a majority stake the business has been consolidat-ed to focus on both medical and general insurance with operations in the wider East African region,” Resolution said.

The company says its policies now cover medical, motor, travel, property and liability, with operations in Uganda, Tanzania and South Sudan.

Resolution made a net loss of Sh246 million last year, widening the net loss of Sh140 million in 2014. The company attributed the performance to increased investments in IT systems and person-nel besides a one-off payment of excise duty on reinsurance commissions.

vjuma@ke.nationmedia.com

Leapf≥og to inject additional Sh1.1bn into Resolution by June

INVESTMENT Fundraising plan expected to change the insurer’ s ownership structure, with Leapfrog remaining the major shareholder

Resolution chief executive Peter Nduati. FILE

BY VICTOR JUMA

The share price of Longhorn Publishers has fallen to lows matching its previous-ly discounted rights issue offer price of Sh4.2 per share, potentially dampening investor interest in the Sh530 million cash call.

The Nairobi Securities Exchange-list-ed firm had calculated that the rights issue offer represented an 18 per cent discount on the stock’s average trad-

ing price of Sh5.12 in the six months to March 22.

Companies raising cash from existing shareholders have traditionally offered new shares at a discount to prevailing market prices to encourage investor participation.

Longhorn’s share price decline last week has, however, given investors an option of buying its shares in the open market at the same price, with cash changing hands among traders and not

going to the company.A potential further price fall will make

the rights unattractive, hurting the fund-raising plan that will close on May 6.

Longhorn’s significant shareholder Centum Investment could however benefit from lack of participation by some investors, with the company hav-ing undertaken to buy up to half of all the 126.1 million shares to be offered in the rights issue.

Centum, which holds a 31.25 per cent

stake in the publisher, has set aside over Sh390 million to participate in the cash call with an aim of raising its ownership to more than 51 per cent.

The move is expected to see the invest-ment firm overtake founder shareholder Francis Nyammo whose equity stands at 34.89 per cent.

“Centum has declared … they intend to take up their rights and take up at least 50 per cent of total available rights,” Longhorn said in a statement.

“This might take their shareholding to above 51 per cent, but the shareholder has categorically stated they have no in-tention to take over the company.”

The investment firm is entitled to buy 39.4 million shares in the rights issue at the offer price of Sh4.2 per share, plac-ing its minimum participation at Sh165.6 million. Raising its stake to 51 per cent in the publisher would require buying an additional 53.8 million shares, raising its total investment to Sh391.6 million.

Longho≥n sha≥e p≥ice tumbles as publishe≥ ta≥gets Sh530m in cash call

8 BUSINESS DAILY | Monday May 2, 2016

BY BRIAN NGUGI

Listed Cables manufacturer East Afri-can Cables is banking on Sh2 billion orders for conductors from state utility Kenya Power in the ongoing electrifica-tion drive to turn around its fortunes.

The company’s chairman Zeph Gi-tau Mbugua yesterday told the Daily Nation/Business Daily the orders which the firm had already began de-livering had boosted its prospects for a turn around.

Depressed demandThe firm, which also makes cables for the telecom industry and households, reported a net loss of Sh741 million for 2015 in what it largely blamed on disrup-tions to output as it upgrades a factory in Kenya, as well as foreign exchange losses and depressed demand due to political uncertainty.

It posted a net profit of Sh341 mil-lion in 2014. In 2015, revenue dropped to Sh3.7 billion from Sh5 billion in 2014.

“The Sh2billion order received from Kenyan Power to supply conductors will

go towards achieving our targets. The company continues to prospect for fu-ture orders in the current year,” Mr Mbu-gua said on the sidelines of the firm’s annual general meeting.

The government’s electrification drive, which Kenya Power is imple-menting, seeks to connect 70 per cent of Kenyans to the national electricity grid by 2017.

Mr Mbugua told shareholders that finished upgrades in its production units would now pave way for the firm to ramp up its production.

Unfair competitionThe company manufactures copper cables and conductors for domes-tic application as well as industrial power applications and aluminium conductors and cables used for power transmission and distribution.

The firm had earlier said its alu-minum business experienced unfair competition from cheap imports, mainly from India and China, given their lower cost of production and ex-port subsidies from country of origin, driving decline in its business volumes by 40 per cent.

The firm comprises of two manu-facturing facilities in Nairobiand one in Dar es Salaam, Tanzania.

The company’s copper factory has been undergoing a major facelift that will see an increase in its production capacity to serve the market better.

East Af≥ican Cables banks on Sh2bn Kenya Powe≥ o≥de≥ fo≥ tu≥na≥ound

Workers at East African Cables factory. DIANA NGILA

BY NEVILLE OTUKI

A United Kingdom (UK)-based solar kits firm has opened its regional office in Nai-robi to power its expansion drive as it eyes a bigger share of the bustling market.

Azuri Technologies, which installs pay-as-you-go solar kits in off-grid homes, plans to ride on the office to grow its reach across the country in addition to Nyanza, Bomet and Eldoret where it has presence.

The drive is set to heat up the solar kits market that has attracted multinationals like Indian firm Orb Energy and Germa-ny-based Mobisol alongside M-Kopa, a local company.

“We aim to offer the cheapest and most flexible solar energy solutions in the region to make it accessible to more off-grid homes,” Azuri chief executive Simon Bransfield-Garth said in Nairobi during the announcement.

The kits, which come with lamps and slots for phone charging and radio, costs between Sh12,500 and Sh24,500.

Customers have the option of pay-ing between Sh31.50 and Sh50 every day through mobile money service over a pe-riod of up to 18 months.

Solar experts reckon that Kenya, like most African nations, has a high poten-

tial to generate solar energy given high radiation levels from the sun through-out the year.

The intensity of sunlight, not heat levels, determines solar electricity pro-duction.

Kenya’s total installed power capac-ity stands at 2,294 megawatts, with solar power accounting for less than one per cent. This has presented a huge market for independent investors to supply kits to off grid customers.

About half of the country’s homes are not connected to the national electric-ity grid, due to cost barriers, a challenge investors seek to tackle with flexible fi-nancing.

Azuri, which has footprints in 12 coun-tries in sub-Saharan Africa, has operated in Kenya since 2011, relying on local agents to supply the solar kits.

“This period has enabled us to study the market, which is why we are opening this office to serve the region.”

The company has launched a solar kit, dubbed HomeSmart, which provides light in homes every night regardless of whether there was sunshine during the day. The kit monitors homes’ power usage and adjusts light brightness according to levels of stored energy to be sustained for a given time.

UK sola≥ kits company Azu≥i Technologies opens Nai≥obi office in ≥egional expansion

CORPORATE NEWS

BY MUGAMBI MUTEGI

UK-based development financier CDC is set to acquire a 40 per cent stake in Athi River Mining (ARM) Cement after the firm injected $140 million (Sh14.1 billion) into the family-owned Kenyan manufacturer.

The CDC funds will allow ARM to retire expensive short-term loans that have been weigh-ing down the company’s earnings.

The CDC is owned by the UK’s Department for International Development (DfID).

The Business Daily has learned that the transac-tion will leave the family of ARM’s chief executive, Pra-deep Paunrana, with a 30 per cent stake while the balance will remain in free float.

“We are proud to back a founder-led frontrunner in East African manufactur-ing,” Mark Pay, CDC’s managing director for equity investments, said in a statement announcing the deal.

“This investment will strengthen a

company making a difference to the lo-cal economy, bringing jobs and lower cost raw materials to a region traditionally dependent on imports.”

The transaction is subject to regula-tory and shareholder approvals.

ARM’s short term debts jumped 35 per cent to Sh14.4 billion in the nine months to September 2015, raising its

finance costs 3.3 times to Sh1.1 billion.

This expense contribut-ed to the firm reporting a net loss of Sh469 million in the same period, reversing the net profit of Sh1.1 billion the year before.

ARM will now channel about $110 million (Sh11.1 billion) of the fresh capital towards settling its expen-sive debt.

The balance will go towards expand-ing its operations and scaling up the busi-ness’ sustainability status such as reduc-ing energy costs and lowering greenhouse gas and dust emissions.

“We chose CDC as an investor and partner to help us achieve a shared vi-sion of creating the leading and lowest-

cost East African cement business,” Mr Paunrana said in a statement.

To free up its balance sheet, ARM initiated a capital-raising drive, seeking funds to pay off the crippling debt. The company in August announced plans to issue a Sh7 billion bond and later raised this amount to Sh10.7 billion.

ARM later ditched this option and instead started the search for a strategic investor who was to inject $125 million

(Sh12.6 billion) into the business in the form of a convertible loan in the form of preference shares.

The investor, who was to earn interest at an undisclosed rate, was to get right to convert the preference into ordinary shares in 2023 in exchange for a stake in the region of 25 per cent stake.

ARM has now chosen to go with an equity investor (CDC) from the start, a cheaper alternative that will however see

the founder shareholders part with a big-ger portion of the company.

“This is a significant milestone in ARM’s journey,” said Mr Paunrana.

CDC’s foray into the country’s cement industry comes at a time when manufac-tures, buoyed by the booming real estate sector, are producing above the market’s absorption, keeping prices stable.

The East African Portland Cement, Bamburi, Mombasa Cement, Savannah and National Cement are among ARM’s leading competitors in the sector. Two week ago, CDC announced that it was in talks to acquire a 10.7 per cent stake in I&M Holdings.

CDC has in the past also provided capital to Equity Bank, Co-operative Bank, Jamii Bora Bank and Chase Bank either through debt and equity. The fin-ancier, together with Actis, jointly invest-ed $25 million (Sh2.5 billion to fund the construction of Garden City Mall along Thika Road.

pmutegi@ke.nationmedia.com

B≥itish financie≥ acqui≥es 40pc ARM Cement stake PLAN Firm set to use Sh11 bn of the Sh14bn CDCs

funds to settle debts that led to a loss last year

An Athi River Mining Cement worker at its factory. FILE

We chose CDC as an investo≥ and

pa≥tne≥ to help us achieve a sha≥ed

vision PRADEEP PAURANA, ARM

CEMENT CHIEF EXECUTIVE

Sh469 millionThe loss incurred by ARM Cement in the nine months to September 2015 on increase in finance costs

9Monday May 2, 2016 | BUSINESS DAILY

A few weeks ago, a work assign-ment took me on a tour of the Maboneng Precinct in Johannes-

burg’s Central Business District (CBD). Now if you are a frequent traveller to Jo-hannesburg, it is quite likely that there is little, if anything, that will take you into the city’s CBD which features tall, im-posing skyscrapers grounded in streets teeming with bustling retail spaces and some rough thoroughfares that even lo-cals fear venturing into.

Most visitors tend to focus on the more glitzy shopping districts of Rose-bank and Sandton rather than the dated and down market offerings to be found in the CBD, which has notoriety for high crime. To get to Maboneng, we drove past the financial district that has the distinct campuses of two of South Africa’s big four banks: Standard Bank and Absa. The two banks have multiple towers in close prox-imity that are linked via underground tunnels and air bridges which reduce the need to walk the streets.

Getting off the ramp from the high-way we entered streets that had clear evidence of time decay: broken windows, graffiti walls and heaps of uncollected garbage. The shops were kindred spirits to Nairobi’s Kirinyaga Road with auto-mobile industry players like “Camara Car Parts” and “Onyechi Auto Repair” dotting the scene nestled next to “Al Hak-im Super Store” that seemed to sell just about anything, “Omega Fire Ministry” which hinted at the promise of spiritual redemption and “Cash For Scrap” that had an equally compelling promise for disposers of scrap metal. Meanwhile the city’s skyscrapers cast long shadows less than 400 metres away.

After making a few wrong turns here and there, we arrived on a street that was straight out of a European capital’s photo album. Chairs and tables filled the streets in front of cafés and restaurants offering multiple gastronomic delights. There was the fashionable Patta Patta restaurant owned by a fairly young South African gentleman called Ziggy, which had eclectic non matching chairs, burlap

lampshades and brick cladded shelves that created a very warm and inviting atmosphere to taste local South African fare. Further down were more artisanal coffee shops and specialist bakeries co-lo-cated with architectural offices and elec-trical engineering consultants making for a very interesting mix of businesses and synergies. This was the heart of the Maboneng Precinct.

According to the official Gauteng Province website, “Maboneng” is a Sotho word meaning “place of light”. In 2008, a developer called Jonathan Lieb-mann bought old construction offices and warehouses dating from the 1900s and, in collaboration with an architect, he transformed the industrial space into a cultural oasis that is now Arts on Main, which is one of Maboneng’s two main building complexes.

The building houses various studios which display beautiful arts and crafts created by local South African artists. One studio was a testimony to social re-sponsibility using creative rather than financial means. With an arresting title of “I was shot in Jo’burg”, the studio is the brainchild of South African architect Bernard Viljoen who converts Johannes-burg’s street children into prolific photographers. His programme started in 2009, when he picked 15 children from Twilight Children’s Shelter in the less than stellar Hillbrow neighbourhood of Johan-nesburg.

He gave them disposa-ble cameras and met them once a week on a Monday afternoon for a workshop. Bernard says, “We learnt how to search for beauty, composition and interest-ing subject matter where we thought there were none.”

In December 2009, they had their first exhibition at the Arts on Main and it was a runaway success. Bernard says, “the kids mingled and chatted and explained their work like they have been doing this for their whole lives. They had a voice. I wanted to create an evening these chil-dren will never forget for as long as they live. It was a great success.”

Having walked the few streets of the Precinct, I was struck by the power of gentrification, and its ability to con-vert previously unattractive and unin-habitable spaces to premier retail real estate in the space of a few years. Every Sunday, the Precinct hosts “Market on

Main” where fresh produce, baked goods, indig-enous plants, books, art and fashion are all showcased.

It launched in January 2011 and has morphed into a com-pelling weekend desti-nation for Johannes-burg residents as one can find Ethiopian, Mo-roccan, Chinese, Italian and Indian food for sale as well as local South Af-rican delicacies.

This is not pointless rambling. What I saw in Maboneng is something that is inspiringly easy to replicate.

From the roller skating youth that throng the car park adjacent to Aga Khan Walk, to the countless artists and designers that showcase their wares in the rather elite confines of the annual Christmas Craft Fair Nairobi has the ca-pacity to showcase its food and culture in an organised, cheap and vibrant man-

ner that can provide depth to the limited public offerings in the city. A drive past the roundabout near ILRI in Uthiru’s shopping centre will reveal an amazing use of public space every Sunday. Some-one was inspired to provide a bouncing castle and other forms of children’s en-tertainment on Sunday afternoons, re-sulting in an efficient and cheap use of a public space that elicits delightful use by the residents of Uthiru.

Parents, children and young couples sit on the grass and make active use of the space provided, which is simply a roundabout on Naivasha Road that has unkempt grass but is transformed into a public utility by an enterprising enter-tainer. From rough neighbourhoods on Nairobi’s Quarry Road to Industrial Area there are lots of opportunities to trans-form streets into public entertainment spaces that can showcase our inimitable Kenyan culture.

We need to deepen our perception be-yond giving youth loans to do businesses and look at art and culture as a credible source of compelling youth engagement as it provides an outlet for self expression as well as a non academic based source of gainful self employment.

Food for thought on this Labour Day holiday.

Carol.musyoka@gmail.com, Twitter: @carolmusyoka

IDEAS & DEBATEOPINIONS I REVIEWS I ANALYSIS

National roller skating team members during a training session at the parking lot next to Aga Khan Walk in Nairobi . FILE

ECONOMY Nairobi should look at culture, art as source of gainful youth engagement

Allow cultu≥e, food display on st≥eets to c≥eate employment

We need to deepen ou≥ pe≥ception beyond giving youth loans to do businesses

NIT PICKER

CAROL MUSYOKA

Riek MacharSouth Sudan Vice President

Other Voices

Guardian, Editorial BoardThe airstrike on an Aleppo hospital is a wake-up call for the UN. It must act now. The world is witnessing a sustained assault on the provision of healthcare in times of conflict. The principle that care comes first has to be enforced.Sadly, this is not an isolated case. From Afghanistan to the Central African Republic, from South Sudan to Yemen and Ukraine, ambulances, hospitals and health centres have been bombed, looted, burned and destroyed.

Mail & Globe, Jacqueline LapoorWith the world focused on the Syrian refugee crisis, we have lost sight of a conflict that could become even worse – Yemen’s civil war. This forgotten war has produced arguably the world’s greatest humanitarian disaster and is on track to become the next major refugee crisis. However, too often Canada’s interests in Yemen are relegated to a single line in the debate about Canada’s arms deals with Saudi Arabia. Why is Canada not thinking more broadly about Yemen?

Bashar AssadSyria President

Justin TrudeauCanada Prime Minister

Daily Monitor, Editorial Riek Machar was sworn in as first vice president of South Sudan , the passing of this political rite hopefully marked the beginning of an end to years of bloodletting. When South Sudan won independence from Sudan, there was a lot of giddiness around. Many thought of the prospects the world’s youngest nation proffered to the Great Lakes region as a whole. We had participated in liberating thecountry, paying a very high price along the way. More importantly, the belief was that with South Sudan calmed down, our own northern frontier would finally find true peace.

10 BUSINESS DAILY | Monday May 2, 2016

I recently attended a workshop on media engagement with conflict and violence in East Africa. I was a panellist in a discussion

on media coverage of elections in the region. I sat in the panel with a colleague. We both ad-dressed the role of the media in elections and the larger context of the environment for free and fair elections.

A point we disagreed on was whether in addressing the challenges around election con-duct, our focus as a region should be on legal processes or on wider legitimacy concerns.

On one hand are statements, largely associ-ated with lawyers who see law as the solution to all problems. I must confess that being a law-yer I am mainly seen to belong to this group. For the legality proponents, we have to always pay attention to the letter of the law. When one steals, the legal question is to determine what the offence is and undergo the process of de-termining guilt and imposing the consequent punishment.

On the other end of the spectrum are those who argue that a fixation with laws does not help solve societal problems. In any case most of the laws in question are either legitimate or even if the laws are not the problem, they are disobeyed with abandon especially by those in authority. Consequently to refer ordinary citizens to the law as a basis for resolving their grievances is to take an escapist route.

A key question is which of the above sides is right in their approach? In answering this I recalled a course I teach at the university, called Jurisprudence. I always tell students Jurispru-dence is not concerned so much with the law, but much more with the philosophy of the law.

The focus is, therefore, on both the substance of the law and also its rationale and the environ-ment in which it operates. It is the intersection of all the disciplines and how they interact in solving societal problems. In this array law is just one of the tools.

Our understanding of the law and rules are influenced by our world view, our operating context and our backgrounds. Political scien-tists will talk about the Political economy. They are in essence making the case that we need to understand the dynamics at play for us to accurately diagnose a problem and prescribe a solution.

In the debate between legality and legitima-cy, the law is seen as an absolute, akin to what the study of jurisprudence refers to as positive law. This is fixation with the letter of the law to the exclusion of its spirit and context. This is the understanding of the law that majority of citizens have. It is the rationale for their dissat-isfaction with legal rules on occasion to address their problems in society.

Lawyers are also guilty in promoting this understanding of the law. This is despite the fact that this formalistic view of law has long been criticised.

One of the critiques relates to apartheid era in South Africa and Nazi regime in Germany. In both instances atrocities were carried out which while formally legal, offended all sense of justice and human rights.

If we were to take the opposite argument, the solution in such a case would be to ignore the

law and focus on justice considerations. Sounds fine until we also realize that this would take us to a rule based on might and not right. Such an approach would favour those with power and disadvantage the weak.

This forms the basis of my argument at the panel discussion that despite its inconveniences we are safer with a rule of law approach.

Such an approach is not obsessed with for-mal letter of the law. It takes the position that effective rule of law requires to bridge the gap between legality and legitimacy. For long there has been debate in legal circles of the linkages between law and morality.

When one reads the Kenyan Constitution, it is easy to see that we have chosen the approach that seeks to link our laws to our moral compass. This is the essence of Chapter Six on leadership and integrity, for example. It makes an effort at dealing with ethical and moral issues using the lens of the law too.

Columnist Jaindi Kisero wrote last week about the role of the church and the private sector in addressing the challenges around elections and the Independent Electoral and Boundaries Commission before the 2017 elec-tions. He ended his column by quoting an Indian jurist on the limits of the law in changing the hearts of human beings. The lesson from that quote is the need to ensure that we ensure that laws are legitimate and deliver just outcomes.

Second, we have to appreciate that laws on their own will not create the kind of society we aspire for. It is affected by context but it also af-fects context. A debate that does not appreciate this intricate link and seeks to either over-glorify the letter of the law or to advocate for disregard of the law is simplistic.Dr Odote teaches at the University of Nairobi

B≥idge gap between legality and legitimacy

COLLINS ODOTE LEGAL

To comment...The editor invites comments on our content and topical issues. Please in-clude your full names, telephone number and address in your letter. Email: bdfeedback2@ke.nationmedia.com

Even as Chase Bank depos-itors celebrated the lend-er’s quick reopening last

week, reports that the Central Bank of Kenya (CBK) had seized Sh8 billion from disgraced di-rectors must have sweetened their week.

According to the regulator, the directors had awarded themselves hefty 15-year interest free loans.

It is our position that those tasked with looking after cli-ents’ money must never seek to enrich themselves through illicit means.

By confiscating all the prime properties acquired fraudulent-ly, the CBK is sending the right

message that it will not tolerate impunity by rogue senior bank officials. To make sure that the practice ceases completely, we urge the regulator to go beyond the repossession of properties and also seek prosecutions.

It is indeed quite shocking that someone can sleep comfortably while knowing that their actions have brought down a financial institution, risking the savings of scores of depositors in the process.

The era of playing Russian rou-lette with other people’s money must cease forthwith. Kudos to the CBK for cracking the whip on errant bankers.

Assets seizu≥e timely

Joe Muganda Chief Executive Officer | Tom Mshindi: Editor-in- ChiefOchieng’ Rapuro: Managing Editor

P.O.Box 49010 GPO Nairobi Telephone: 254 20 328 8104 Fax: 254 20 214849Email : bdfeedback@nation.co.ke www.bdafrica.com

Published by the Nation Media Group, Kimathi Street, Nairobi

When it comes to mak-ing laws our legislators can hardly be faulted.

However, our major failing has always been on the implementa-tion part.

That is the reason why many Kenyans have received reports about the Bribery Bill 2016 with mixed feelings.

The Bill prescribes severe pen-alties against corruption in the pub-lic and private sectors.

If passed, those convicted of bribery will now face a Sh5 mil-lion fine or 10 years in jail plus other punitive measures such as disqualification from running for public office or holding a public post for a period of 10 years.

The Bill also seeks to punish anyone that fails to report an act of bribery to the Ethics and Anti-Corruption Commission. Failure to prevent an act of bribery will also be a strict liability offence under the proposed law , meaning that the prosecution won’t be required to prove any kind of intention or positive action.

It is crystal clear that the cor-ruption monster has permeated all segments of our society and previous attempts to eradicate it have failed terribly.

This is despite cases of corrup-tion continuing to rise at an alarm-ing rate. While we welcome any ef-forts aimed at ridding our society

of this menace, we also have to cau-tion against being complacent in the war against graft.

The Bill is currently before our legislators who are notorious for not backing anything that endan-gers their positions.

The country is headed for a General Election next year and voter bribery and other electoral malpractices are normally com-mitted by politicians.

Though the proposed law is a step in the right direction, we must be careful not to keep our hopes very high lest the same legislators mutilate it like they have done to previous legislation.

Legal experts have already termed the Bill as overambitious. For example, the proposed penal-ties apply regardless of the bribe. Does it mean that a motorist who bribes a traffic police officer with Sh50 will receive the same pun-ishment as a tender-preneur who gives procurement officers hefty bribes to get a multi-million shil-ling contract?

We urge the National Assem-bly to go through the Bill with a fine tooth comb and remove any ambiguities.

Kenyans are tired of corruption and the least our lawmakers owe current and future generations is a tough law that will totally eradicate the problem and entrench moral probity in the general society.

P≥oposed stiff penalties good fo≥ wa≥ against co≥≥uption

EDITORIAL & OPINION

“Where do I see myself in five years? I see myself sitting right in this office... Firing you...”

VIEWS FROM ABROAD Opinions f≥om a≥ound the wo≥ldUgly echoes from the past“My foreign policy will always put the interests of the American people, and American security, above all else. That will be the foundation of every decision that I will make. America First will be the major and overriding theme of my administration.”

It is extremely unfortunate that in his speech Wednesday

outlining his foreign policy goals, Donald Trump chose to brand his foreign policy with the noxious slogan “America First,” the name of the isolationist, defeatist, anti-Semitic national organisation that urged the United States to appease Adolf Hitler.Their solution to the international crisis lay in a negotiated peace with Hitler.

Tough job heading probe teamIf Russian liberals think they’ve got it bad, they should stop for a moment to consider the plight of Alexander Bastrykin. Formally, Bastrykin’s role as head of Russia’s Investigative Committee is to investigate crime while simultaneously competing for resources and influence

with police and prosecutors. By night, the ludicrousness of that position — evidenced by

the running battle between his committee and the federal prosecutors over whether to remand businessman Dmitri Kamenshchik — evidently leaks into his alter-ego as absurdist political theorist. Little did he know he’d be have competition in the form of Ella Pamfilova, the head of the Russian Central Election Commission.

Bold new vision for Saudi ArabiaTectonic plates are shifting in the Persian Gulf. The world’s energy market is being transformed as the global economy slows. Iran’s rehabilitation in the wake of the nuclear deal struck last year is altering regional strategic dynamics. Saudi Arabia, long accustomed to being the

dominant player in the region, must adapt to these changes.

This is the logic behind Saudi Vision 2030, a long-term economic blueprint unveiled Monday that seeks to end the kingdom’s dependence on oil .t is a bold programme, spurred by economic reality — low oil prices — and strategic calculations. Vision 2030 is necessary, but necessity alone will not ensure its implementation or its success.

MOSOW TIMES

MOSCOW

JAPAN TIMES

TOKYONEW YORK TIMES

NEW YORK

11Monday May 2, 2016 | BUSINESS DAILY

The new Constitution set up 47 counties as a means of actualising Kenyans’ wish for a system of government that recognises

the country’s diversity. Devolved was meant to deepen self-govern-

ance and enhance citizen participation in making decisions affecting them. Counties were meant to take government closer to Kenyans. Article 174 of the Constitution identifies decentralisa-tion of State organs from the capital and provi-sion of easily accessible services throughout the country as objects of devolution.

The Fourth Schedule of the Constitution de-tails how various functions are to be distributed between the national and county governments. For the land sector, county governments took up the function of county planning and devel-opment, including survey, mapping, boundaries and fencing.

As counties came into existence, the process of reforming the land sector saw the National Land Commission (NLC) take office in February 2013. The commission’s main function is man-aging public land on behalf of the national and county governments.

The institutional framework of land admin-istration and management has since changed. Where we previously had the Ministry of Lands administering land, we now have the ministry and NLC work with county land management boards at the devolved level.

SettlementIn addition we have county departments led by county executives and city or municipality boards for urban areas. Lack of clarity on the separation of functions between these institutions at the county can work against the very spirit of devo-lution. It is important that both citizens and the respective government officials know the man-date of these institutions with respect to land administration and management.

So, which service should you seek at the Coun-ty Land Management Board? And what role does a city or municipality board play in the setup of land administration?

The Lands ministry deals with all matters regarding land searches, registration, adjudica-tion and settlement, and planning. County lands boards, agents of NLC, manage public land and may process leases for renewal. The Environment and Land Court, established by the Environment and Land Court Act, is charged with resolving disputes related to land and those of an environ-mental manner.

These officials should be clear on their respec-tive mandates. Clarity of roles, and cooperation between them, will improve services in the land sector and promote social and economic develop-ment. Furthermore, citizens can only hold these institutions accountable if they are fully aware of the roles they play. The writer is a land and natural resources man-agement specialist

Cla≥ify the ≥oles of land se≥vice p≥ovide≥s at county, national levelsBRIAN KAZUNGU MANAGEMENT

EDITORIAL & OPINION

To begin with, lack of under-standing of key issues around devolution is generating a great

deal of mistrust among stakeholders with some, especially the minority coa-lition in both houses of parliament and counties, believing that the national government is seeking to frustrate devolution.

Some counties, for instance, con-test the piecemeal transfer of func-tions which has taken place so far, arguing that all powers provided in Schedule Four of the Constitution be transferred at once.

This demand is partly driven by the believe on the part of county gov-ernments that officials of the nation-al government and local government structures being phased out remain resentful of the invasion of their pre-vious scope of authority.

While this may be true, the real-ity on the ground is that many county governments lack capacity to absorb all such powers in a short term. This argument is strengthened when one considers, for instance, that Kenya cur-rently lacks trained and experienced legislative drafters, fiscal and economic planning experts to adequately cater for the 47 counties.

Revenue allocation is also proving to be a divisive issue. By law, counties are entitled to at least 15 per cent of the total national revenue collected. De-spite many counties currently enjoying adequate funding, there is still a feeling that budgetary allocations need to be increased and that the central govern-ment is reluctant to do so.

Many county governors have since launched a spirited campaign to that effect and have interpreted the per-ceived national government reluctance as a ploy to frustrate the effectiveness of devolved units. On closer scrutiny

though, the reality is that county gov-ernments do not have the absorption capacity for more than 15 per cent of the national government revenue. Added to this are demands by county assembly authorities, like their na-tional counterparts, for increased re-muneration and benefits beyond the Sh150,000 monthly package.

Marginalised groups Other challenges involve the four dif-ferent offices involved in the devolu-tion process, each with their own ad-ministrative and bureaucratic culture that complicates the process; lack of audit reports for structures, assets and liabilities inherited from former local government institutions; as well as failure to observe the ‘‘at least a third rule’’ which was designed to ensure adequate representation of women and other marginalised groups in the devolved structures. These challenges

do not only pose great risks for the ef-fective roll out of devolution in Kenya but also provoke some critical ques-tions about the current implementa-tion strategy.

For instance, in Kenya where the average annual salary is just Sh160,000 and the vast majority of the population falls within or below this income brack-et, will the new devolved government structure, and with it the demands from officials for more benefits and remuneration, not place a punitive wage bill on Kenyan taxpayers?

Second, in the absence of proper au-diting of inherited structures from the defunct local government structures and the impossibility of effectively policing all aspects of this transition, how will the risks of asset stripping be mitigated in a country where corrup-tion and fraud is still rife?

Regarding the one third rule, the situation is even more dire as ingen-

ious devices are being used to circum-vent it. In Kericho County, for instance, many individuals are masquerading as members of the Tallai clan, which is one of the county’s traditionally, ex-cluded groups, to secure nomination to the County Assembly, to the peren-nial detriment of actual members of the clan.

With no clear solutions from au-thorities that effectively address this, why would ordinary Kenyans and af-fected groups not be sceptical about the value of the process?

I am not suggesting that the process of implementing devolution is failing or bound to collapse. I am merely stat-ing that we can do better, by sign-post-ing issues that relevant authorities and stake holders will be ill–advised to ig-nore if we want to effectively complete a process whose start has neither been the best nor the worst.NDIRANGU NGUNJIRI, via email

LettersThe editor welcomes brief letters on topical issues. Opinions expressed here are not necessarily those of the editor or publisher. They may be edited for clarity, space or legal considerations. Send via e-mail to bdfeedback2@ke.nationmedia.com

Address devolution challenges and opportunities

Some of the delegates at the recent devolution conference in Meru. County governments do not have the absorption capacity for more than 15 per cent of the national government revenue. PHOEBE OKALL

The economic and political reach of the US, arguably the most visible and vocal Western

country on the African continent, is gradually being diminished. This fol-lows a pattern in which the economic and political stronghold of Western countries has ebbed as the role of non-traditional donors such as China has grown in importance.

US official development assist-ance is focused significantly in three regions — Asia, Europe and sub-Saha-

ran Africa. Between 1980 and 2012 a significant portion of its official devel-opment assistance went to Asia, $205 billion (Sh20.5 trillion), followed by Europe with $200 billion (Sh20 tril-lion) and $120 billion (Sh12 trillion) to sub-Saharan Africa. This is based on calculations from the Organisation of Economic Cooperation and Develop-ment’s online credit reporting system database.

In Africa for more than 30 years Sudan, Ethiopia, Kenya and the Demo-cratic Republic of Congo were the high-est recipients of US aid. US foreign aid has generally been motivated by po-

litical, economic and altruistic factors, with the objective of promoting eco-nomic growth. This includes poverty reduction, improving governance and increasing access to basic education and health care.

Pre-China a vast amount of US foreign aid was destined to the con-flict countries of Sudan, Somalia and Ethiopia. After China’s entry, Nigeria, Uganda, Tanzania and South Africa became part of the destination for a significant amount of US aid.

Before China’s entry, both donor interest and recipient need were equally factored into the US aid deci-

sions. This is based on looking at the determinants of US aid allocation to 31 sub-Saharan African countries.

After China’s entry, recipient need became a more prominent factor than donor interest. This shows that China’s increasing importance in Africa seems to have reduced the space within which the US can play a role in terms of its economic and political strength on the continent. This “squeezing out” of the US may have resulted in a shift in US foreign aid focus towards the “needs” aspects of foreign aid.Amusa is a lecturer at the University of South Africa

How US aid has changed ove≥ China’s g≥owing influence KAYFAYAT AMUSA

ASSISTANCE

12 BUSINESS DAILY | Monday May 2, 2016

BY BRIAN WASUNA

After close to three years and many court cases in Nairobi and Nakuru, the curtains appear to be coming down on one of the

world’s biggest players in the cut flower industry — Karuturi Limited — after its owners conceded to an application to wind it up.

Receiver managers Muniu Thoiti and Kuria Muchiru from Pricewater-houseCoopers (PwC) have asked the High Court to lift an order barring the sale of Karuturi’s property after the flower firm’s owners failed to object to its winding up.

The receivers want the orders barring the sale of Karuturi’s property lifted so that they can commence the liquidation process, which will see its assets sold off to settle creditors’ demands.

The High Court will give a final ver-dict on Thursday and creditors have two weeks to table debt claims.

Surya Holdings and Rhea Holdings — Karuturi’s parent firms — have aggressively fought the com-pany’s winding up since 2014 when CFC Stanbic placed it under receivership for defaulting on a $4 million (Sh400 million) loan.

Difficult times fell upon Karuturi following the

2007-2008 post-election violence which affected several businesses countrywide, and the firm failed to pick itself up from these challenges.

The receiver managers now say that all efforts to get Karuturi back on its feet have failed and the only card they have left to play is to call it a day on what was once Kenya’s largest flower firm.

Mr Thoiti and Mr Muchiru who were appointed to replace Ian Small and Kieran Day say in their applica-tion that they have been unable to elicit a response from Karuturi’s shareholders in calling for capital injection.

They add that CFC Stanbic has since 2014 been forced to inject more funds into the collapsed flower firm, but the lender has washed its hands off Karuturi.

“The company continues to be loss-making and as such continuation of trade is not possible. The bank has notified the receiver managers that it

will no longer continue to fund the operations of Karuturi. The receivers have urgently sought capi-tal contributions from the directors of the company but there has been no formal response,” Mr Thoiti says in an affidavit.

Mr Thoiti says they have supplied the firm’s di-

‘END OF ERA’

Judge to give direction on the sale plan of largest flower company

Focus on Thu≥sday cou≥t ≥uling ove≥ sale of t≥oubled Ka≥utu≥i

NEWS INDEPTH

A worker picks flowers in Naivasha.Karuturi was Kenya’s largest flower firm.FILE

rectors with all of Karuturi’s books of accounts but that the owners are yet to come back with a solid offer from an investor.

“The dire financial situation facing the company cannot await the hearing and deter-mination of the suit and the same amounts to sufficient reason to review the order (barring sale of Karuturi’s assets) so as to allow the sale

Some of firm’s creditors CfC Stanbic claims $4 million from

Karuturi in loans. The Industrial Credit and Investment

Corporation of India demands Sh2bn. The KRA says the firm owes it Sh962

million in unpaid taxes. Crayfish took it to court over Sh500m

while workers are claiming unknown amount in unpaid salaries and allowances.

DEBT TABLE

The di≥e financial situation facing

the company cannot await

the hea≥ing and dete≥mination of

the suitMUNIU THOITI, RECEIVER

MANAGER

13Monday May 2, 2016 | BUSINESS DAILY

of the charged assets or the enterprise,” he adds. The flower firm has several assets, most notably thousands of acres of land valued at well over Sh8 billion.

Karuturi also owns a health centre, three schools, staff houses and a host of farming equipment whose total value in shillings is also in the region of the bil-lions.

The firm was in 2014 forced to surren-der ownership of its football team, Karu-turi Sports Club, which was at the time one of the teams in the Kenyan Premier League.

The team, Naivasha’s key sporting flag-bearer, was acquired by fresh produce com-pany Vegpro and consequently took after its new owner’s name.

Its debts are also huge. Aside from the Sh400 million owed to CFC Stanbic, the firm is also engaged in a dispute with Industrial Credit and Investment Corpo-ration of India (ICICI) Bank over a $19.9 million (Sh2.01 billion).

The taxman has not been left behind in the list of Karuturi’s creditors as the Kenya Revenue Authority claims Sh962 million in unpaid taxes.

The KRA claims Karuturi falsely stated prices while trading with its sister companies so as to evade taxes (transfer pricing).

Crayfish Camp has also demanded Sh500 million from the troubled firm, and last year filed a suit at the Nakuru High Court seeking to sell Karuturi’s as-sets to recover its debts.

Crayfish says the debt accrued from unpaid rent for a parcel of land it leased to Karuturi.

Workers on Karuturi’s farms are yet to be paid their dues in full as some salaries and allowances are pending. The Kenya Plantation Workers Union is yet to crunch up the numbers and come out with an exact figure of what employees are owed.

The health centre and schools are among the services that have not only

benefited Karuturi’s 2,400 employees but more than 10,000 Naivasha residents who depend on the facilities. The end of the road for the company could mean that the facilities’ dependants may have to seek other options.

With creditors breathing down Karu-turi’s neck, the flower firm has only man-aged to keep away from the jaws of death through the courtroom where several orders have been issued barring the com-pany’s closure.

Cases filed in the Nairobi and Nakuru High Courts have been the main battle-ground where Karuturi has found reprieve, but may now be the venue it will take a final bow.

Receivership expensesIn Nairobi, Karuturi’s directors have, since 2014, viciously fought a winding up peti-tion filed by Allpacks Limited, a creditor. They have also engaged CFC Stanbic in a suit seeking to lift the receivership since 2014.

But the receiver managers believe that awaiting the conclusion of the cases may only lead to deterioration of Karuturi’s assets, which will only erode the value of those which were used as security to secure the loan from the bank.

“Ideally if we are allowed to sell all or part of the charged assets it will enable us to realise value from the sale of the enter-prise to meet receivership expenses, claims of the secured and preferential and to give any remaining monies to the persons en-titled thereto,” Mr Thoiti adds.

The company’s owners claim that the previous receivers Ian Small and Kieran Day have, on several occasions, curtailed plans by investors and other banks seek-ing to take over CFC’s loan.

For the shareholders, it is a race against time, and the question is whether they will manage to find a buyer or another bank willing to buy out CFC’s loan in time.

bwasuna@ke.nationmedia.com

NEWS INDEPTH

A greenhouse at Karuturi Limited: While the parent firms of the flower company have fought its winding up, they finally conceded and managers wants its property sold. FILE

June 11, 2014

The ownership of troubled Karuturi Limited in June 2014 managed to se-cure a court order barring its receiver managers from selling off its assets to recover several debts it owes to credi-tors, including a $4 million (Sh400 million) loan the flower firm was struggling to repay CfC Stanbic.

The temporary restraining order has been keeping creditors at bay since Karuturi was placed under re-ceivership and is what new receivers Muniu Thoiti and Kuria Muchiru are trying to set aside.

CfC Stanbic had planned to sell off Karuturi’s assets after completing a valuation of its entire operations and properties in Kenya.

But Justice Francis Gikonyo issued the restraining order to preserve the assets as he heard an application by the firm’s shareholders accusing CfC of prematurely placing Karuturi un-der receivership.

The flower firm borrowed Sh222.7 million from CfC Bank in December 2012, which was to be repaid in 60 equal monthly instalments of Sh4.5 million each.

Justice Gikonyo while issuing the orders held that his decision was also based on the receivers’ opinion that the business had started recovering hence it was fair to allow it time to get back on its feet.

Receivers Kieran Day and Ian Small had tipped the firm to get back to its glory days.

But the current receivers now say Karuturi is beyond salvation.

June 17, 2015

Just over a year after Justice Gikonyo stopped the liquidation of Karuturi, he banished a receiver manager ap-pointed by India’s ICICI Bank which claims the flower firm owes it $19.9 (close to Sh2 billion).

ICICI appointed Kolluri Venkata Kamasastry as a joint receiver man-ager in February last year seeking to recover the disputed sum.

The flower firm consequently filed an application seeking to bar Mr Ka-masatry from joining Mr Day and Mr Small in managing Karuturi.

Justice Gikonyo ruled that ICICI’s appointment of a receiver manager to run Karuturi was malicious, as the bank was the first to breach the loan contract.

He held that the lender’s failure to release $25 million (Sh2.5 billion) to Karuturi in full stalled the flower

firm’s operations and made repay-ment difficult.

Karuturi’s owners had accused Mr Kamasastry of destroying some of the flower firm’s assets to devalue its brand equity.

They claimed Mr Kamasastry de-stroyed the Karuturi managing direc-tor’s farm house valued at more than $3 million (Sh273 million) despite the existing court order stopping any in-terference with the Naivasha-based company’s property, and even filed a contempt of court application against the receiver.

October 23, 2015

CfC Stanbic in October opted to replace receiver managers Kieran Day and Ian Small, replacing them with PwC duo Kuria Muchiru and Muniu Thoiti.

The move came as good news for Karuturi’s owners who had through-out the legal battle expressed their discomfort with Mr Small and Mr Day.

Karuturi’s owners had, on several occasions, accused Mr Small and Mr Day of sabotaging their attempts to find a buyer for the flower firm, or a foreign lender to take over CfC Stan-bic’s loan.

They claimed that Mr Day and Mr Small had refused to allow them access to Karuturi’s books of ac-counts for presentation to potential buyers.

Karuturi’s owners held that Mr Small and Mr Day had curtailed ef-forts to have Bell House Capital Inter-national, Bhama Consulting of SSG Capital Hong Kong and Axis Bank Limited as the investors who were willing to buy out the debts.

India’s Axis Bank, they held, was willing to buy out CfC’s loan and pump much needed capital into Karuturi.

They also accused the former re-ceivers of colluding with a receiver appointed by India’s ICICI Bank to destroy the managing director’s farm house valued at over Sh273 million.

Justice Francis Gikonyo in July last year issued an order compelling Mr Day and Mr Small to make available all books of accounts to Karuturi’s owners.

The new receivers have since complied with the court order but no investor appears to be on board with investing in Karuturi.

December 6, 2015

The Nakuru High Court in Decem-ber last year spared Karuturi the fate of an auctioneer’s hammer after it stopped yet another creditor — Cray-fish Camp — from selling off assets to recover a debt.

Justice Janet Mulwa issued the temporary order after Karuturi’s re-ceiver managers told the court that the flower firm was in the process of paying other debts and that Crayfish would get its dues.

Crayfish Camp had called on auc-tioneers to attach Karuturi’s property to recover Sh500 in unpaid rent. Na-ivasha-based Crayfish Camp had let the land to Karuturi’s sister company Twiga Roses.

Karuturi’s receivers held that the troubled firm was ready to pay off the debt in monthly instalments of Sh400,000.

Crayfish opposed the proposal, claiming the arrears were long over-due and should be completed at once. The rent arrears date back to 2009 when Karuturi allegedly entered into an illegal sub-lease with the then ten-ant— Kalasha Holdings Limited.

Crayfish, in court papers, said that the flower company had been reluc-tant to pay the debt incurred five years before the company was put under receivership, hence it didn’t expect to be paid unless allowed to auction off some of Karuturi’s assets.

The matter is before Justice Mulwa in the Nakuru High Court.

How Ka≥utu≥i has fought fo≥ su≥vival since ≥eceive≥ manage≥s took ove≥

B E F O R E C O U R T B R I A N W A S U N A

The flower farm has fought within the courtrooms to remain in business.

14 BUSINESS DAILY | Monday May 2, 2016

Uganda’s inflation fell to 5.1 per cent year-on-year in April from 6.2 per cent in March, the Uganda Bureau of Statistics (UBOS) said . Uganda’s central bank cut its policy rate earlier this month, saying headline and core inflation would hover around 6.5 percent in the first half of 2016, before declining to the bank’s medium term target of 5 percent. Investment in infra-structure will help Uganda’s economy to grow by 5.5 percent in 2016-2017, faster than in the current fiscal year, the International Monetary Fund said on Wednesday.The east African country has various multibil-lion dollar infrastructure projects in progress, including highways, hydropower dams and a crude oil refinery.

Uganda March inflationrate falls to 5.1 per cent

KAMPALA

The World Bank is delaying approval of further development loans to Mozambique pending a debt sustainability analysis to be conduct-ed with the International Monetary Fund, a spokesman said.The IMF said last week Mozambique had ad-mitted to having more than $1 billion of undis-closed debt and that the two parties were eval-uating the implications of the disclosure.“Processing of investment lending currently continues, while further approval of develop-ment policy loans is delayed pending the DSA and the analysis of macro-economic stabil-ity by the IMF and the World Bank,” the World Bank spokesman said.“Following the DSA, a decision will be made on the volume of World Bank support to Mozam-bique.”Prior to last week’s IMF statement, a source at the Fund had told Reuters that Mozambican firm Proindicus, owned by the interior and de-fence ministries and the state security servic-es, had been lent $504 million by Credit Suisse and $118 million by Russia’s VTB.

BRIEFING

MAPUTO

World Bank delays approvalof loans pending analysis

The US has announced more than $86 million humanitarian assistance to South Sudan. US embassy indicated the money would be used to help the conflict-affected people in South Sudan as well as the refugees in the region. South Sudan was in dire need of safe drinking water, emergency healthcare, nutrition services, shelter, improved sanitation, agricultural train-ing, tools and inputs and fishing supplies. The statement explained that a portion of the funding would go into helping the internally displaced persons both within and outside of UN protection sites, those seeking asylum and South Sudanese refugees in neighbouring coun-tries. The funding, the statement added, would also support clinical and psychological treatment for survivors of gender-based violence, as well as the transport of life-saving supplies and aid workers to the hard-to-reach areas. “For more than two years, the delivery of life-saving humanitarian assistance has been seri-

US gives SOuth SUdan $86m in humanitarian assistance

JUBA

When the international forest conser-vation scheme known as REDD+ first came to Tanzania in 2008, it brought hopes of slowing deforestation and curbing climate change.

But according to a recent report, funding for the programme is drying up, threatening the future of the East African country’s efforts to safeguard its forests.

REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is a UN-backed push to reduce climate-changing carbon dioxide emissions through having developed countries pay poorer na-tions to protect their forests, which store carbon.

Richer countries buy credits for CO

2 emissions reductions, and the

money is used to keep tropical for-

ests standing and to support forest communities. But a report last month from a forest finance tracking initia-tive called “REDDX”, run by non-prof-it group Forest Trends, said financing to prepare for REDD+ in Tanzania had stagnated, with no new funding announced since 2010.

As a result, pilot REDD+ projects in Tanzania, including forest conser-vation activities and land-use plan-ning, have been shuttered, it said.

“The lack of new donor funding is a matter of serious concern for the sustainability of the REDD+ initiative in Tanzania,” the report added.

When REDD+ was launched in Tanzania, Norway was its biggest donor, committing $80.2 million in 2009, or around 85 per cent of all REDD+ funding for the country, to

be paid over five years.Other backers included Finland,

Germany, Britain, Belgium, the Rockefeller Foundation, the World Bank, the multilateral UN-REDD programme and the government of Tanzania itself.

The money was used to develop an action plan with 10 priority areas, including identifying and tackling the drivers of deforestation and forest degradation, and accurately measur-ing and recording emission levels.

But according to the REDDX re-port, the flow of funds from Norway’s International Climate and Forest Ini-tiative has declined significantly since the programme began.

“Following a jolt of funding from Norway that jump-started Tanzania’s REDD+ process in 2009, progress

has now come to a standstill,” Brian Schaap, REDDX senior program as-sociate, said in a statement.

Norway’s involvement with the REDD+ initiative in Tanzania has had its detractors. In 2012, it drew criticism when green group WWF was embroiled in allegations of misappro-priating NOK25 million ($3.07 mil-lion) of Norwegian REDD+ money.

The WWF Tanzania country di-rector, Stephen Mariki, denied the accusations, but later resigned.

And with only 18 percent of the REDD+ funding going to the govern-ment, according to the report, there is concern that too much money is going to NGOs and academic institu-tions, and not enough into building state capacity.-REUTERS

Tanzania fo≥est conse≥vation at ≥isk as funds ≥un out

REGIONAL NEWS

BY BD CORRESPONDENT IN KAMPALA

Uganda has raised the alarm over use of anti-retroviral drugs on pigs to fatten them and treat

swine flu.The misuse of the drugs, which cost

the governments billions of shillings, is used on pigs to keep them healthy and meet the region’s growing appetite for pork.

But public health advocates argue that the practice breeds antibiotic-resistant germs in animals that can cause deadly

harm to consumers. “It is really wrong to use the drugs meant for humans on animals and vice versa, because the bio-chemical path that each of them takes is different,” says Dr Patrick Buchan Ocen, the acting Lira district health officer.

Whereas getting ARVs for persons living with HIV/Aids in other parts of the country is a struggle, residents of Barapwo parish, Lira sub-county , have

“enrolled” their pigs on ARVs.The farmers mix ARVs with the ani-

mals’ feed to avoid swine fever.“Last month, there was an outbreak

of swine fever, so I mixed ARVs with the feeds and gave to my piglets. However, only three survived and 10 died,” a farmer said on condition of anonymity.

He claimed more than 100 of the pigs that were given the drugs have survived.

Another farmer confessed that he feeds his pigs on the drug at least once every month.

“We always get the drugs from HIV/Aids patients and give our pigs. Those who did not feed ARVs to their pigs last month lost all their animals to swine fe-ver,” she claims.

However, experts say ARVs can be used in the treatment of viral conditions, which some curious farmers think can actually cure swine fever. But one may be under dosing the animals because they take considerable larger doses of antibi-otics than human beings.

African swine fever (ASF) is a highly contagious haemorrhagic disease that affects pigs, warthogs, European wild boar and American wild pigs. With high virulence forms of the virus,

ASF is characterised by high fever, loss of appetite, haemorrhages in the skin and internal organs, and death in 2-10 days on average. Mortality rates may be as high as 100 per cent.

Dr Francis Okwir, a veterinary doc-tor said some farmers say pigs that have been put on ARVs grow faster and they are always fat but we have not yet con-firmed that.

Health officials say there is deterio-rating health among some persons on ARVs, suspecting the drugs given to them are used for other purposes. Many are said to be weak and their CD4 count has dropped drastically.

“We think those who pick up the drugs are actually using them because when they come to health facilities, you find that they have marked that they have used the drugs as recommended,” Dr Okwir.

Dr James Okullo, the in-charge of Erute said wrong medication to animals might have side effects to humans who consume the meat.

“Even a small amount of dose you get from the meat is dangerous. If you eat the meat of the pig that was given ARVs, by the time you start taking ARVs, you will become resistant to the drugs,’’ he said.

Uganda fa≥me≥s use ARVs to fatten pigs and t≥eat swine flu

REGIONAL NEWS

RISKY Farmers ignore threat to consumers’ health in the race to meet region’s growing appetite for pork

Pig farmers in Uganda are feeding their animals with anti-retroviral drugs. FILE

15Monday May 2, 2016 | BUSINESS DAILY

TH

E B

IG S

TOR

Y

BY VICTOR AMADALA

Edwin Kiama, a Nairobi-based strategic marketing consultant, defines a brand slogan as a simple

and catchy phrase accompanying a logo or brand, which encapsulates a prod-uct’s appeal, or the mission of a firm, and makes it more memorable in the minds of a consumer.

Multiple studies indicate that effective slogans result in enhanced sales, providing brands with much needed differentiation in highly competitive markets. A recent Journal of Consumer Research reported that a slogan that captures consumers’ emotions can cause them to spend two times more than they had initially in-tended.

However, Mr Kiama warns that poorly conceptualised slogans can sink a brand, arguing that some brands pick on fancy words, hastily, that have no effect on brand building and can attract a public backlash that terribly hurts the brand’s image.

A good brand slogan must capture the true spirit behind the brand and offer re-alistic promises to consumers crafted in a few words of inspirational language. “Brand slogans are supposed to be con-cise, creative, and convey some quality that

beats to the heart of the brand,’’ he said. Marketers across the globe support Mr

Kiama’s points. According to Social Me-dia Today, an online marketing network, slogans must relate to everyday life situa-tions, representing the real essence of the brand, and appealing emotionally, while defining the aim of the product, in a sim-ple, instigating and catchy way.

While praising Nike’s ‘Just Do It’ slo-gan, which has been in use for the past 27 years for its simplicity and inspiration, Adrenaline, an online psycho market-ing publication explained that the best slogans activate an emotional stimulus within the brain, where neuroscientists estimate that 95 per cent of human deci-sions are made, resulting in an emotional bond between brand and consumer.

Indeed, BrandUNIQ, a US based stra-tegic marketing agency, argues that when done well, a slogan can become the cen-trepiece of a company’s identity.

In today’s media-saturated environ-ment, where a person is exposed to up to 5,000 advertisements in a day, the agency explains that an effective brand slogan helps companies to cut through the chatter and get consumer attention quickly. It adds that while a paragraph-long explanation of a product might give

MARKETING Poorly constructed concepts will take your firm to the bottom of the ocean

Nike said ‘Just Do It’: A great slogan captures the spirit and offers realistic promises in everyday life.PHOTO/NIKE

potential customers plenty of information, a punchy slogan creates a memorable im-age in the mind.

But although most marketers believe that a slogan must be simple, a 2013 study by the California State University dubbed Slogan recall: what really matter harshly disputes this notion. It explains that while making a slogan simple for the sake of con-ciseness is common, slogans with a modest degree of complexity in terms of semantics enjoy deeper processing and easier recall compared to simpler ones.

The study’s researchers further ex-plain that slogans that cause consumers to process the perceived information more quickly and deeply are easily retrieved

from memory. In a more extreme contrary position,

the School of Business Management of Hong Kong’s University of Science and Technology released a study in 2014 that disputed claims that slogans add value to brands. In the study titled Brands, Slo-gans and Backlash, three scholars, Juliano Laran, Amy N. Dalton and Eduardo B. An-drade argued that consumers perceive slo-gans as blatant persuasion tactics, which they are prone to resist.

The researchers, however, stressed that their results did not imply that slogans had negative effects, only that they can deter consumers, if off point, or too aggressive. -AFRICAN LAUGHTER

W≥iting b≥and slogans that put food on the table

p.16/17

p.17 p.18Total donates Sh1m fuel as Kenya sets ablaze 106 tonnes of ivory

STRATEGY Real-time micro-moments help brands to increase sales

STANDARDSHow seals of quality influence consumer decisions

CORPORATE EVENTS | NEW PRODUCTS & SERVICES | EXECUTIVE APPOINTMENTS | MARKET TRENDS

CAUSE

Lamu

Deal to distribute quality digital content in AfricaThe African Media Initiative (AMI) has teamed up with Africa 24 Media to launch a platform that will distribute quality digital content across the continent. The partnership estab-lishes the African Content Exchange (ACE) that will help African media houses access Pan African stories that aim to add depth to broad-cast programming in the region. ACE will ini-tially make available to media houses dozens of quality features .

Jambojet opens office in Lamu for easy bookingTravellers to the coastal town of Lamu can now book their air tickets on the island following the launch of Jambojet offices in the area. The opening of the office came barely a year after the low-cost segment of national career Kenya Airways launched its maiden flight to the coastal archipelago.Since Jambojet’s launch, the total number of pas-sengers travelling to Lamu has increased 71 per cent compared to the previous year.

BRIEFING

Aga Khan University tostudy maternal healthThe Aga Khan University has partnered with Kenya’s Ministry of Health and other agencies to carry out a study of Kenya’s progress in re-ducing maternal and child deaths. The Kenya Countdown to 2015 Country Case Study pro-vides policymakers, health care providers and the public with a roadmap that can guide ef-forts to accelerate improvements in maternal and child health and to achieve the new targets set in Sustainable Development Goals by 2030.

Geneva

Telecoms agency salutes Girls in ICTThe global technology community last Thurs-day celebrated the international ‘Girls ICT Day’ – an awareness raising initiative that seeks to help girls and young women pursue studies and careers in technology. The day is marked every year on the fourth Thursday of April. ITU estimates that there will be a skills shortfall of over two million in the information and com-munication technology (ICT) sector in the next five years.

Nairobi

Jambojet CEO Willem Hodius (right) presents a dummy ticket to Deputy Governor of Lamu County Eric Mugo and Lamu County official Samia Omar Bwana during the official opening of Jambojet office in Lamu. COURTESY

Nairobi

16 BUSINESS DAILY | Monday May 2, 2016

BY SILVIA MWENDIA

Three weeks ago, LG Electronics’ 2016 4K series of smart TVs was certified as a recommended Netf-

lix television for the second year in a row in a move that could see LG raise sales of the product in the Kenyan market by up to seven per cent.

The Netflix Recommended TV pro-gramme is an evaluation recognising smart televisions that deliver excellent performance for Netflix and a better In-ternet television experience overall. It is designed to help consumers identify televisions that offer a quicker, easier and up-to-date Netflix experience. Un-der the programme, smart televisions are tested according to a defined set of criteria to receive the Netflix Recom-mended TV logo.

According to a 2013 study, Market Structure, Reputation, and the Value of Quality Certification, by Daniel W. Elfenbein, Raymond Fisman and Brian McManus, quality certification programmes typically raise sales of a product by up to seven per cent. The re-search used data from eBay to examine how the benefits of quality certification programmes vary in markets and seller-level attributes.

“Holding sale probability constant, the value of certification is equivalent to an increase in £0.94 per item or roughly 6.7 per cent at the median values in the data,” reads the report.

When given the opportunity, brands are quick to gain seals of ap-

proval through quality certification programmes as it makes them more credible in the eyes of the public. “Customers need a reference point to make a decision on deciding whether or not to try out a product,” said Moses Kemibaro, founder of Kenyan digital business agency, Dotsavvy.A report titled Standards matter to con-sumers by BSI Group also concludes that consumers today care about the quality marks found on products. “They protect us and give us the information that we need to make informed choices. Standards help to make products and services safer, of a better quality and easier to use,” reads the report.

PurchasingQuality marks have also been found to affect consumers purchasing decisions. In a 1975 study titled The Use of Seals of Approval in Consumer Decision-Mak-ing As a Function of Cognitive Needs and Styl’, Thomas L.Parkinson found that “the use of seals of approval as in-formational sources in consumer deci-sion-making is influenced by individual personality traits.”

These individual personality traits were cited as the need for certainty and cognitive style. Not all consumers will respond to the use of seals of approval, but those with these two personality traits will. However, the comprehensive adoption of seals has produced some de-gree of backlash from consumers.

Speaking at the Goethe Institut,

STANDARDS Certification marks matter for buyers keen on safety, accessibility and service delivery

How seals of quality influence consume≥ decisions

Cabinet Secretary Judi Wakhungu releases balloons during the ISO certification ceremony at Jomo Kenyatta University of Agriculture and technology in Juja last year. ISO is one of the most renowned quality assurances. FILE

Holger Brackemann from German consumer organisation Stiftung Warentest warned of consumers be-ing deceived by such labels. “There is systematic abuse, because manu-facturers know that most consum-ers base their purchase decision on seals of approval – the more logos a product bears, the better it will sell,” he said.

But although seals of approval may be misused, they still do play an important role in ensuring quality is assured.

One of the most renowned quality assurances is the ISO certification de-

BY OTIATO GUGUYU

Barclays Bank of Kenya is investing Sh230 million in youth empowerment projects that will be rolled out under its “Shared Growth Agenda.”

The bank is planning to train 70,000 Kenyan youths on the skills needed to start and run a business. Managing Director Jeremy Awori said Barclays Bank was creating innovative solutions like deposit ATMs that would make the cost of doing business cheaper and more convenient. “It is not just about giving money, I think it is about building capability and build-ing skills, understanding what financial solu-tions they need and in many cases that doesn’t have to be lending,” he said.

The Shared Growth Agenda will be driven through three pillars— Education and Skills, Enterprise Development and Financial In-clusion.

Through ReadytoWork, the flagship pro-gramme under education, Barclays Bank of Kenya will prepare young people for jobs by providing online courses on a range of people, work, entrepreneurial and money skills.

Barclays will also help young people start, run and grow their businesses in order to gen-erate income and employment.

Under the Financial Inclusion pillar, Bar-clays will enter into partnerships to facilitate the development of technology that will pro-mote inclusive banking models in order to increase access to financial services to the underserved. Mr Awori however said that all banks are exposed to bad loans during tough economic times and it would be up to indi-vidual banks to decide which risk profile they want to lend to.

Barclays is partnering with seven organisa-tions that promote the youth empowerment agenda to drive the initiative.

Ba≥clays to invest Sh230m in youth p≥ojects

Mr Abdullatif Essajee, FCB Bank director, handing over a cheque to one of the FCB Foundation’s education beneficiaries at Mama Fauzia Children’s Home in Kasarani. COURTESY

Marketing Manager KenolKobil Eugene Ngwiri attends to a customer’s car at Kobil Limuru. The company is running a country wide sales promotion where customers enjoy a fuel discount of Shs2 on cash payments and Sh 4 on K-Card.COURTESY

CORPORATE SCENE

Vitafoam Products donated mattresses, pillows and blankets to the Art and Abolition organisation which rehabilitates young girls who have survived sexual violence. Rakesh Shah (right), the company’s CEO presents bed linen to Brittanie Michelle Richardson, the Executive Director of the organisation. COURTESY

Toyota Kenya managing director Sachio Yotsukura poses with the new Toyota RAV4 2016 during its official launch in Nairobi. COURTESY

17Monday May 2, 2016 | BUSINESS DAILY

BY JOE OTIN

“If a tree falls in a forest and no one is around to hear it, does it make a sound?” This is an 18th century philosophical question relating to ob-servation and reality and the argument goes that sound is created by vibrations and captured by the ear, and if nobody’s around to sense it, then the sound did not happen.

It is relevant in marketing because if your brand exists to do a thing and nobody knows about it, then does the brand truly exist?

David Ogilvy says it in another way, “Unless your advertising contains a big idea, it will pass like a ship in the night.“ It is standard practice to spend five per cent of your revenue on market-ing in order to sustain or grow your market share and this investment is in jeopardy if there is no response from your target groups.

Every new form of media comes with its own nuances, and advertising and marketing strate-gies have to adapt to effectively leverage on them. When the Internet began to grow in reach, it was primarily accessed through desktop computers and today 86 per cent of Internet users in Kenya access it through smartphones.

That change of focus has altered the way people experience online media and the activi-ties that they carry out as a result. When I first tried to tie a bow tie, I intuitively consulted the instructions on the box that it came in to learn how to tie one and found that they were of no use. I next looked it up on YouTube and found numer-ous video demonstrations that were very useful. Google describes this as a show-me-how moment in their new opinion on mobile advertising.

The new approach called micro-moments, is around the need to know or to do something and the ability to get immediate information or take action on the Internet through smart-phones. Google has observed the changes in our behaviour brought about by mobile Internet and how we are interacting with brands online and making decisions. For example, a few days ago I noticed that my daughter’s bicycle seat and handle bars needed to be raised. After fid-dling with the bicycle for a little while I turned to Google for tips and realised that there was one essential tool missing that was required to complete the task. If the hardware shop in the

mall nearby had an online store, I would have immediately ordered the item, but they don’t which meant that I had to make a trip there at some point.

This is what we refer to as online search and offline purchase and in Kenya a recent study shows that the levels of online search greatly exceed offline purchase.

The number of web searches points to the increased potential for sales, and we believe that the ability to securely order and pay for the products on the Internet will greatly in-crease sales.

Google offers an example of a mother, Stacy, who buys a new family car in the US and tracks her journey from her intention to buy through to the final purchase.

The entire process included 900 digital in-teractions, 71 per cent of which occurred on mobile. Stacy searches online for the right kind of car for her family and watches online video reviews and reads comments about the avail-able options from people living in her country. She then goes on the the manufacture websites to find out more before she visits the websites of the dealers near her.

As a visit to the showroom is a major part of the process in vehicle sales, her final decision is made when she visits the dealers near her so that she can see and test the shortlisted cars.

In contrast, a car buyer in Kenya would have a greatly different experience. They will watch videos of car reviews done in foreign countries and foreign languages. They won’t be able to evaluate local dealer information online because they do not have adequate web presence.

So, the customer will search online to short list the vehicles they are interested in, and then they will walk around the corner to the nearest second hand car dealership to look at the lat-est Japanese imports! The new car dealerships miss a big opportunity to reach and interact with car buyers every day because of non-existent or mediocre online presence.

This is just one example of a sector that would greatly benefit from taking their business on-line. In the information age, our economy ben-efits with the establishment of systems that will leverage on the new technology and it is driven by three core actions which are, building an infrastructure to give everyone access to the Internet, getting all businesses online, and fi-nally giving more people a reason to access the world wide web.Mr Otin is a digital marketing expert and CEO of The Collective - an interactive ad agency. He is also the President of PAMRO and the Chairman of the Ad-vertising Standards Board of Kenya.

Real-time micro-moments help brands to increase sales

A mobile phone user. People these days tend to go online for new ways to use a product or service. AFP

BY MARYANNE GICOBI

Truck owners involved in an ac-cident will get compensation for goods lost in a new insurance cov-er that will see trade boosted.

Insurance company UAP Old Mutual has launched a cover where truck owners grounded as a result of an accident will get up to Sh300,000 to fix any damages caused by the accident, ensuring that transporters get their trucks back on the road fast enough.

The cover will also protect truck owners who have suffered financial losses from the accident by bearing their bank loan repay-ments for up to three months.

UAP Old Mutual Group Man-aging Director for General In-

surance James Wambugu said the product dubbed “TruckSure” was necessitated by the trans-porters need to recover their lost cargo and compensate employees involved in the road accident.

“Transport and logistics is a key driver of the economy and every time goods are not able to reach their destination , compa-nies suffer financial losses related to lost productivity and sales,” he said.

Road transport remains the preferred mode of moving cargo with the population of transport trucks increasing across Kenya, Uganda, Rwanda, South Sudan, DRC and Tanzania with trans-porters using the roads exposed to various risks.

The Old Mutual boss added that in a departure from the in-surance tradition, the recipients of this insurance cover will be ex-empted from paying an “excess” in case of an accident whose repair cost is at least over five per cent of the truck’s insured value.

“Our intention is to ensure that the transporters return to their businesses in the shortest time possible and with the least possi-ble inconvenience”, he said.

TruckSure is part of UAP Old Mutual’s legacy of developing specialised commercial insur-ance products.

Trucks carry imports such as fuel and other vital goods for neighbouring countries.

UAP unveils product to cover truck accidents

How seals of quality influence consume≥ decisions

Holger Brackemann from German consumer organisation Stiftung Warentest warned of consumers be-ing deceived by such labels. “There is systematic abuse, because manu-facturers know that most consum-ers base their purchase decision on seals of approval – the more logos a product bears, the better it will sell,” he said.

But although seals of approval may be misused, they still do play an important role in ensuring quality is assured.

One of the most renowned quality assurances is the ISO certification de-

veloped by the independent, non-gov-ernmental, global body-International Organization for Standardization. Be-ing awarded an ISO certification is no small feat with only 1.6m certifi-cates being issued as of 2014, a three per cent increase from the previous year, according to The ISO Survey of Management System Standard Cer-tifications – 2014.

Between 2013 and 2014, Kenya recorded a drop in the issuance of ISO 9001 (quality management sys-tems) certificates from 590 to 565 country wide.

But despite their low uptake, IS0

certifications have been proven to benefit businesses, perhaps an in-dication of how quality certification programme can also aid brands.

“Standards can be used to stream-line the internal processes of a compa-ny, for example by reducing the time needed to perform specific activities in the various business functions, de-creasing waste, reducing procure-ment costs and increasing productiv-ity. The contribution of standards to the gross profit of companies ranges between 0.15 per cent and 5 per cent of the annual sales revenues,” read the 2014 study, ‘Economic benefits of standards’ by ISO.

RevenueAnother key benefit has been the crea-tion or entrance into new markets. The 2014 study reports that standards “have been used as the basis for de-veloping new products and entering new markets”. This, in turn, helps the market uptake of products. In 2014, some companies were even able to garner a gross profit increase of up to 33 per cent of their annual revenue on the basis of the ISO process, help-ing to position themselves as leaders in the field.

The ISO process has also acted as a basis for brands to innovate their business processes, thereby enabling “companies to expand their suppliers’ network or to introduce and man-age new product lines effectively.” In other cases, standards have helped to reduce the risk to companies of in-troducing new products in national markets.

-AFRICAN LAUGHTER

16 BUSINESS DAILY | Monday May 2, 2016

BY SILVIA MWENDIA

Three weeks ago, LG Electronics’ 2016 4K series of smart TVs was certified as a recommended Netf-

lix television for the second year in a row in a move that could see LG raise sales of the product in the Kenyan market by up to seven per cent.

The Netflix Recommended TV pro-gramme is an evaluation recognising smart televisions that deliver excellent performance for Netflix and a better In-ternet television experience overall. It is designed to help consumers identify televisions that offer a quicker, easier and up-to-date Netflix experience. Un-der the programme, smart televisions are tested according to a defined set of criteria to receive the Netflix Recom-mended TV logo.

According to a 2013 study, Market Structure, Reputation, and the Value of Quality Certification, by Daniel W. Elfenbein, Raymond Fisman and Brian McManus, quality certification programmes typically raise sales of a product by up to seven per cent. The re-search used data from eBay to examine how the benefits of quality certification programmes vary in markets and seller-level attributes.

“Holding sale probability constant, the value of certification is equivalent to an increase in £0.94 per item or roughly 6.7 per cent at the median values in the data,” reads the report.

When given the opportunity, brands are quick to gain seals of ap-

proval through quality certification programmes as it makes them more credible in the eyes of the public. “Customers need a reference point to make a decision on deciding whether or not to try out a product,” said Moses Kemibaro, founder of Kenyan digital business agency, Dotsavvy.A report titled Standards matter to con-sumers by BSI Group also concludes that consumers today care about the quality marks found on products. “They protect us and give us the information that we need to make informed choices. Standards help to make products and services safer, of a better quality and easier to use,” reads the report.

PurchasingQuality marks have also been found to affect consumers purchasing decisions. In a 1975 study titled The Use of Seals of Approval in Consumer Decision-Mak-ing As a Function of Cognitive Needs and Styl’, Thomas L.Parkinson found that “the use of seals of approval as in-formational sources in consumer deci-sion-making is influenced by individual personality traits.”

These individual personality traits were cited as the need for certainty and cognitive style. Not all consumers will respond to the use of seals of approval, but those with these two personality traits will. However, the comprehensive adoption of seals has produced some de-gree of backlash from consumers.

Speaking at the Goethe Institut,

STANDARDS Certification marks matter for buyers keen on safety, accessibility and service delivery

How seals of quality influence consume≥ decisions

Cabinet Secretary Judi Wakhungu releases balloons during the ISO certification ceremony at Jomo Kenyatta University of Agriculture and technology in Juja last year. ISO is one of the most renowned quality assurances. FILE

Holger Brackemann from German consumer organisation Stiftung Warentest warned of consumers be-ing deceived by such labels. “There is systematic abuse, because manu-facturers know that most consum-ers base their purchase decision on seals of approval – the more logos a product bears, the better it will sell,” he said.

But although seals of approval may be misused, they still do play an important role in ensuring quality is assured.

One of the most renowned quality assurances is the ISO certification de-

BY OTIATO GUGUYU

Barclays Bank of Kenya is investing Sh230 million in youth empowerment projects that will be rolled out under its “Shared Growth Agenda.”

The bank is planning to train 70,000 Kenyan youths on the skills needed to start and run a business. Managing Director Jeremy Awori said Barclays Bank was creating innovative solutions like deposit ATMs that would make the cost of doing business cheaper and more convenient. “It is not just about giving money, I think it is about building capability and build-ing skills, understanding what financial solu-tions they need and in many cases that doesn’t have to be lending,” he said.

The Shared Growth Agenda will be driven through three pillars— Education and Skills, Enterprise Development and Financial In-clusion.

Through ReadytoWork, the flagship pro-gramme under education, Barclays Bank of Kenya will prepare young people for jobs by providing online courses on a range of people, work, entrepreneurial and money skills.

Barclays will also help young people start, run and grow their businesses in order to gen-erate income and employment.

Under the Financial Inclusion pillar, Bar-clays will enter into partnerships to facilitate the development of technology that will pro-mote inclusive banking models in order to increase access to financial services to the underserved. Mr Awori however said that all banks are exposed to bad loans during tough economic times and it would be up to indi-vidual banks to decide which risk profile they want to lend to.

Barclays is partnering with seven organisa-tions that promote the youth empowerment agenda to drive the initiative.

Ba≥clays to invest Sh230m in youth p≥ojects

Mr Abdullatif Essajee, FCB Bank director, handing over a cheque to one of the FCB Foundation’s education beneficiaries at Mama Fauzia Children’s Home in Kasarani. COURTESY

Marketing Manager KenolKobil Eugene Ngwiri attends to a customer’s car at Kobil Limuru. The company is running a country wide sales promotion where customers enjoy a fuel discount of Shs2 on cash payments and Sh 4 on K-Card.COURTESY

CORPORATE SCENE

Vitafoam Products donated mattresses, pillows and blankets to the Art and Abolition organisation which rehabilitates young girls who have survived sexual violence. Rakesh Shah (right), the company’s CEO presents bed linen to Brittanie Michelle Richardson, the Executive Director of the organisation. COURTESY

Toyota Kenya managing director Sachio Yotsukura poses with the new Toyota RAV4 2016 during its official launch in Nairobi. COURTESY

17Monday May 2, 2016 | BUSINESS DAILY

BY JOE OTIN

“If a tree falls in a forest and no one is around to hear it, does it make a sound?” This is an 18th century philosophical question relating to ob-servation and reality and the argument goes that sound is created by vibrations and captured by the ear, and if nobody’s around to sense it, then the sound did not happen.

It is relevant in marketing because if your brand exists to do a thing and nobody knows about it, then does the brand truly exist?

David Ogilvy says it in another way, “Unless your advertising contains a big idea, it will pass like a ship in the night.“ It is standard practice to spend five per cent of your revenue on market-ing in order to sustain or grow your market share and this investment is in jeopardy if there is no response from your target groups.

Every new form of media comes with its own nuances, and advertising and marketing strate-gies have to adapt to effectively leverage on them. When the Internet began to grow in reach, it was primarily accessed through desktop computers and today 86 per cent of Internet users in Kenya access it through smartphones.

That change of focus has altered the way people experience online media and the activi-ties that they carry out as a result. When I first tried to tie a bow tie, I intuitively consulted the instructions on the box that it came in to learn how to tie one and found that they were of no use. I next looked it up on YouTube and found numer-ous video demonstrations that were very useful. Google describes this as a show-me-how moment in their new opinion on mobile advertising.

The new approach called micro-moments, is around the need to know or to do something and the ability to get immediate information or take action on the Internet through smart-phones. Google has observed the changes in our behaviour brought about by mobile Internet and how we are interacting with brands online and making decisions. For example, a few days ago I noticed that my daughter’s bicycle seat and handle bars needed to be raised. After fid-dling with the bicycle for a little while I turned to Google for tips and realised that there was one essential tool missing that was required to complete the task. If the hardware shop in the

mall nearby had an online store, I would have immediately ordered the item, but they don’t which meant that I had to make a trip there at some point.

This is what we refer to as online search and offline purchase and in Kenya a recent study shows that the levels of online search greatly exceed offline purchase.

The number of web searches points to the increased potential for sales, and we believe that the ability to securely order and pay for the products on the Internet will greatly in-crease sales.

Google offers an example of a mother, Stacy, who buys a new family car in the US and tracks her journey from her intention to buy through to the final purchase.

The entire process included 900 digital in-teractions, 71 per cent of which occurred on mobile. Stacy searches online for the right kind of car for her family and watches online video reviews and reads comments about the avail-able options from people living in her country. She then goes on the the manufacture websites to find out more before she visits the websites of the dealers near her.

As a visit to the showroom is a major part of the process in vehicle sales, her final decision is made when she visits the dealers near her so that she can see and test the shortlisted cars.

In contrast, a car buyer in Kenya would have a greatly different experience. They will watch videos of car reviews done in foreign countries and foreign languages. They won’t be able to evaluate local dealer information online because they do not have adequate web presence.

So, the customer will search online to short list the vehicles they are interested in, and then they will walk around the corner to the nearest second hand car dealership to look at the lat-est Japanese imports! The new car dealerships miss a big opportunity to reach and interact with car buyers every day because of non-existent or mediocre online presence.

This is just one example of a sector that would greatly benefit from taking their business on-line. In the information age, our economy ben-efits with the establishment of systems that will leverage on the new technology and it is driven by three core actions which are, building an infrastructure to give everyone access to the Internet, getting all businesses online, and fi-nally giving more people a reason to access the world wide web.Mr Otin is a digital marketing expert and CEO of The Collective - an interactive ad agency. He is also the President of PAMRO and the Chairman of the Ad-vertising Standards Board of Kenya.

Real-time micro-moments help brands to increase sales

A mobile phone user. People these days tend to go online for new ways to use a product or service. AFP

BY MARYANNE GICOBI

Truck owners involved in an ac-cident will get compensation for goods lost in a new insurance cov-er that will see trade boosted.

Insurance company UAP Old Mutual has launched a cover where truck owners grounded as a result of an accident will get up to Sh300,000 to fix any damages caused by the accident, ensuring that transporters get their trucks back on the road fast enough.

The cover will also protect truck owners who have suffered financial losses from the accident by bearing their bank loan repay-ments for up to three months.

UAP Old Mutual Group Man-aging Director for General In-

surance James Wambugu said the product dubbed “TruckSure” was necessitated by the trans-porters need to recover their lost cargo and compensate employees involved in the road accident.

“Transport and logistics is a key driver of the economy and every time goods are not able to reach their destination , compa-nies suffer financial losses related to lost productivity and sales,” he said.

Road transport remains the preferred mode of moving cargo with the population of transport trucks increasing across Kenya, Uganda, Rwanda, South Sudan, DRC and Tanzania with trans-porters using the roads exposed to various risks.

The Old Mutual boss added that in a departure from the in-surance tradition, the recipients of this insurance cover will be ex-empted from paying an “excess” in case of an accident whose repair cost is at least over five per cent of the truck’s insured value.

“Our intention is to ensure that the transporters return to their businesses in the shortest time possible and with the least possi-ble inconvenience”, he said.

TruckSure is part of UAP Old Mutual’s legacy of developing specialised commercial insur-ance products.

Trucks carry imports such as fuel and other vital goods for neighbouring countries.

UAP unveils product to cover truck accidents

How seals of quality influence consume≥ decisions

Holger Brackemann from German consumer organisation Stiftung Warentest warned of consumers be-ing deceived by such labels. “There is systematic abuse, because manu-facturers know that most consum-ers base their purchase decision on seals of approval – the more logos a product bears, the better it will sell,” he said.

But although seals of approval may be misused, they still do play an important role in ensuring quality is assured.

One of the most renowned quality assurances is the ISO certification de-

veloped by the independent, non-gov-ernmental, global body-International Organization for Standardization. Be-ing awarded an ISO certification is no small feat with only 1.6m certifi-cates being issued as of 2014, a three per cent increase from the previous year, according to The ISO Survey of Management System Standard Cer-tifications – 2014.

Between 2013 and 2014, Kenya recorded a drop in the issuance of ISO 9001 (quality management sys-tems) certificates from 590 to 565 country wide.

But despite their low uptake, IS0

certifications have been proven to benefit businesses, perhaps an in-dication of how quality certification programme can also aid brands.

“Standards can be used to stream-line the internal processes of a compa-ny, for example by reducing the time needed to perform specific activities in the various business functions, de-creasing waste, reducing procure-ment costs and increasing productiv-ity. The contribution of standards to the gross profit of companies ranges between 0.15 per cent and 5 per cent of the annual sales revenues,” read the 2014 study, ‘Economic benefits of standards’ by ISO.

RevenueAnother key benefit has been the crea-tion or entrance into new markets. The 2014 study reports that standards “have been used as the basis for de-veloping new products and entering new markets”. This, in turn, helps the market uptake of products. In 2014, some companies were even able to garner a gross profit increase of up to 33 per cent of their annual revenue on the basis of the ISO process, help-ing to position themselves as leaders in the field.

The ISO process has also acted as a basis for brands to innovate their business processes, thereby enabling “companies to expand their suppliers’ network or to introduce and man-age new product lines effectively.” In other cases, standards have helped to reduce the risk to companies of in-troducing new products in national markets.

-AFRICAN LAUGHTER

18 BUSINESS DAILY | Monday May 2, 2016

JAMES KARIUKI

Kenya’s time-conscious professionals and astute traders will have their motor vehicle breakdowns sorted out immediately with the launch of a new insurance policy.The new product ‘Orient X-tense’ seeks to en-sure busy people with deadlines to beat and professionals on urgent assignments have reliable mobility options even in the event of a motor breakdown.The policy, which is a product of Kenya Ori-ent Company, targets professionals offering critical services such as doctors, supplies and security.“Any doctor heading for a surgical theatre as-signment should never be rendered unable to move even in the event that he suffers a motor vehicle breakdown,” said Kenya Orient manag-ing director Muema Muindi. “He only needs to call us so we can get him another vehicle while his car is being repaired at a dealers’ ga-rage,” he said.Mr Muindi said the product, which is a first in East Africa seeks to address the needs of a growing clientele whose businesses require regular physical presence in different locations and therefore need efficient mobility solution.Customers applying for the new product can book motor insurance with any provider but proceed to buy Kenya Orient’s Xtense product.The product protects vehicles against me-chanical breakdown and electrical failure and is available for any vehicle that is less than 12 years old and has travelled less than 200,000 kilometres.“We also require the same vehicle to be for personal use, say a corporate head’s vehicle or a personal vehicle of any engine capacity,”

said Mr Muindi.Mr Muindi said with the product, business-people and professionals would be more pro-ductive since the burden of maintaining their vehicles will be shouldered by an insurance company.“This is another great innovation that will give car owners peace of mind with a guarantee of minimised future repair costs and significant savings,” he said.The MD said that while new vehicles enjoyed upto two-year parts and mileage warranty, ‘Orient X-tense’ provides owners with an ex-tended ‘warranty’.Clients buying the new product will benefit from a current valuation report and a thorough motorvehicle checkup thereby ensuring that their vehicles enjoy all-round benefits.Kenya Orient Insurance is a locally registered company with 17 branches and 179 employees with an annual turnover of about Sh2.5 billion.

Kenya Orient Company managing director Muema Muindi during the launch of Orient Xtense. DIANA NGILA

Kenya Orient eyes busy vehicle owners with instant repair policy

BY MARYANNE GICOBI

Oil marketer Total Kenya donated fuel worth Sh1 million that was used to torch an estimated five

per cent of the world’s seized ivory last Saturday.

The event was graced by several heads of state, renowned conserva-tionists and celebrities.

The 105 tonnes of ivory and 1.35 tonnes of rhino horn were set ablaze by a mixture of diesel and kerosene sprayed under the tusks with pipes and jets to fuel the fire.

The mixture of kerosene and diesel

fuel is highly inflammable and offered the amount of heat that was needed to reduce the pile into ashes.

The system was designed by Robin Hollister, who used it in 1989 when the then President Daniel Moi led the burn-ing of a 12,000-kilogramme stockpile.

Hollister waited for President Uhuru Kenyatta to put a flame on the stack of ivory and then switched on a spout of fuel that ignited the stockpile resulting in a huge blaze that got the incinera-tion going.

This was the fourth time Kenya was burning ivory.

The first ivory bonfire was led by President Moi in 1989, President Mwai Kibaki burnt a stockpile in 2011 and President Uhuru Kenyatta last year.

The government hopes Saturday’s event will be a firm statement against poaching which threatens to wipe out the remaining elephants and rhinos in the Kenyan wild.

On Thursday, Mr Kenyatta, British actress Elizabeth Hurley and dozens of African dignitaries and leaders attended the Giants Club Summit in Laikipia to discuss how to protect Africa’s remain-ing elephants.

Total Kenya has annually held The Rhino Charge event to raise money to construct an electric fence surrounding the Aberdares, Mt Kenya and Mau Eburu forests to protect elephants and rhinos from poachers.

Total donates Sh1m fuel as Kenya sets ablaze 106 tonnes of ivo≥y

A Total Kenya worker holds one of the 25,000 elephant tusks incinerated over the weekend. Total Kenya donated 20,000 litres of fuel. COURTESY

19Monday May 2, 2016 | BUSINESS DAILY

BY CHARLES MWANIKI

Standard Chartered has lost nearly a quarter of its value at the Nairobi Securities Exchange (NSE) since the closure of its books for bonus and dividend issues.

The bank closed Friday at Sh191 a share, down Sh59 from Sh250 previous Friday when the register on the divi-dend of Sh17 per share and a bonus issue of one-for-nine closed.

In the one month between the bonus and dividend an-nouncement and the closure of the reg-ister (March 23 to April 22), the stock had gained 20.2 per cent.

“The rally before April 22 was driv-en by the bonus issue, with investors

normally looking to sell at a premium before registers close on bonus shares,” said Sterling Capital analysts Eric Munywoki.

“Ideally, when bonus shares are issued the share price of a counter should naturally adjust downwards in a similar proportion, and this adjustment starts im-mediately the register closes. This is why we have seen the price of Standard Chartered

erode.”Standard Chartered (StanChart) cur-

rently has 309.16 million shares in issue,

which will rise to 343.5 million when the new bonus shares are listed.

StanChart which issued a profit warn-ing last November reported an after-tax profit of Sh6.3 billion last year, down from Sh10.4 billion in 2014.

It however retained its dividend at Sh17 a share, keeping one of the highest

dividend yields in the market at 8.37 per cent. This makes the counter attractive to dividend-seeking investors ahead of book closures.

Only BAT Kenya and Williamson Tea paid a higher dividend a share last year, at Sh49.50 and Sh40 respectively.

Share splitInvestors in the stock market have in the past pushed for share splits on a number of nominally highly priced shares that include StanChart and BAT, saying that this would make them more accessible to small retail investors who would other-wise be put off by the high entry price.

Last month, StanChart chief execu-tive officer Lamin Manjang said that the extra 34.5 million shares will boost the liquidity of its stock thus removing the need for a share split.

“We have responded on the issue of bonus shares. We believe that is the right thing to do,” Mr Manjang said.

The stock has historically been among the more illiquid in the market due to the nature of the shareholding, with Standard Chartered Plc the majority shareholder holding 73.9 per cent (as per December 2015 filings).

Local institutions hold a further 14.48 per cent in the lender, leaving just 10.5 per cent in the hands of local retail investors.

The stock was a week ago removed from the list of constituent stocks of the NSE 20 share index. To determine constituent counters, the NSE targets companies with at least 20 per cent free float, a minimum market capitalisation of $198,000 (Sh20 million) and counters that are actively traded.cmwaniki@ke.nationmedia.com

BOURSE Bank’s share tumbles to Sh191 with an analysts saying a drop was expected following a Sh17 bonus issue

Passers-by in front of a StanChart branch in Nairobi. EVANS HABIL

StanCha≥t stock slides at NSE as it goes ex-dividend

We have ≥esponded on the

issue of bonus sha≥es. We believe

that is the ≥ight thing to do

LAMIN MANJANG, STANCHART

CEO

MONEY & MARKETSPRICES I RESULTS I DATA

BY GEORGE NGIGI

The average size of mobile-based fi-nancial transactions declined 12.5 per cent in the first three months of the year indicating increased uptake at the retail level.

In the period under review the av-erage transaction was Sh2,251 down from Sh2,574 last year, data from the Central Bank of Kenya (CBK) shows.

The drop follows a sharp increase- 43 per cent- in the number of people using mobile phones for financial deals to 36.6 million in March from 25.6 million a year earlier.

The CBK report shows 344 mil-

lion transactions worth Sh774.4 bil-lion were conducted using mobile phones in the three months to March compared to 252.7 million deals of Sh650.5 billion in a similar period last year. This follows the entry of commercial banks in mobile trans-actions dominated by M-Pesa, of-fered by Safaricom, widening reach of the platform.

Some of the new entrants include Equitel, a product of Equity Bank and KCB M-Pesa, a partnership between the largest lender by asset base in the country and giant telecom Sa-faricom.

Other players include yuCash, Air-

tel Money, MobiKash, Tangaza Pesa and Orange Money “We had issued 1.7 million Equitel SIM cards as at end of December with 90 per cent of them being used for banking,” said Equity Bank’s chief executive James Mwangi during a recent investor briefing.

Banks have been offering loans through mobile phones encouraging the use of the same channel to settle payments.

KCB processed 3,527,074 loan appli-cations made through phones last year up from 150,531 the previous year.

Equity Bank said its average loan size for cash repayable in a month was Sh7,000, Sh40,000 for three-month credit and Sh120,000 for one year debt.

Mobile money agents increased to 150,987 by the end of March from 128,591 in the same period last year.

The value of cash transacted daily through mobile phones has risen to Sh8.6 billion from Sh7.2 billion last year and Sh4.6 billion three years ago. M-Pesa remains the key player in mo-bile money transfer with data from the Communications Authority indi-cating Sh267 billion was transacted through the platform in the last quar-ter of 2015 when a total Sh290 billion was transferred.

Equitel transferred Sh17 billion while Airtel moved Sh4.3 billion.

The convenience in use of mobile money and increased adoption by individuals and companies has been cited as one of the reasons behind slow uptake of card payment in the country.

Ave≥age mobile-based deals decline signals su≥ge in ≥etail uptake

Safaricom’s M-Pesa shops on Nairobi’s Banda Street. Of the Sh290bn trans-acted last year, the platform moved Sh267bn. FILE

CBK deputy gove≥no≥ expected to ≥etain Bambu≥i Cement boa≥d seat BY GEOFFREY IRUNGU

Central Bank of Kenya (CBK) deputy gov-ernor Sheila M’Mbijiwe is seeking reelec-tion to the board of giant cement maker LafargeHolcim majority-owned Bamburi Cement.

A notice sent to shareholders last week says the CBK senior executive will be seek-ing new mandate when the company holds its 65th annual general meeting on June 2 in Mombasa.

The 58-year-old senior CBK executive—who also sits on the regulator’s Monetary Policy Committee—was set to retire by rota-tion but is seeking to retain the seat.

“The 65th Annual General Meeting of the shareholders of Bamburi Cement Lim-ited will be held in Mombasa at the Nyali International Hotel on Thursday June 2, 2016 at 2.30pm,” read the notice.

Others seeking re-election are Daniel Patterson and D. Drouet who are also re-tiring by rotation but are eligible to seek to be elected again.

The cash-rich company will be holding the AGM to ratify the payment of a dividend of Sh6.00 per share which was paid on Oc-tober 30 last year.

The meeting will also be seeking to de-clare a final dividend of Sh7.00 per share for the year ending last December and increase the directors’ fees.

The company made Sh5.9 billion in net profit last year, up from Sh3.9 billion the

previous year – a 51.2 per cent growth.The turnover rose by nine per cent to

Sh39.2 billion driven by increased demand in the key domestic markets in Kenya and Uganda.

The demand came from large infra-structure projects as the domestic market experienced a slowdown in the last three months of last year.

Sh5.9 billionBamburi Cement’s net profit last year, a 51.2 per cent increase from the previ-ous year

Deputy CBK Governor Sheila M’Mbijiwe. FILE

20 BUSINESS DAILY | Monday May 2, 2016

I BELIEVEMY FATHER

WHEN HE SAYSHE USED TO BE

TOP IN HIS CLASSLIES HAVE THE POWER TO CHANGE YOU

BELIEVE THE TRUTH

21Monday May 2, 2016 | BUSINESS DAILY

An unfinished hotel and empty swim-ming pool sit sadly on the lush hill-side of Pitigliano in Tuscany, where

they should have welcomed the holiday-makers who flock to central Italy.

But the Tosteto spa sits even more heav-ily on the balance sheet of Banca Monte dei Paschi di Siena, which lent 11 million euros to the developer before declaring him in default eight years ago, and is still trying to recoup some of this cash.

Monte dei Paschi is one of the weakest banks in a sector saddled with 200 billion euros ($227 billion) in loans unlikely ever to be paid back.

These are holding back lending in the euro zone’s third-largest economy and strangling growth after a three-year re-cession.

Prime Minister Matteo Renzi is set to ap-prove an emergency decree later on Friday aimed at stabilising the industry by cutting the time it takes to recover debts.

Until recently, Italian banks took seven to eight years on average to recoup bad loans.

That is down to three and a half, and a proposed reform could reduce that to seven to eight months by creating a fast-track sys-tem, a central bank source said.

But the Pitigliano development high-lights the slog lenders still face calling in old debts, which could strengthen their balance sheets, satisfy European capital requirements, and free them up to lend.

Monte dei Paschi, which declined to comment for this article, seized the spa in 2010, according to a local court docu-ment.

Six auctions have failed to attract a buy-er, partly because the original developer still holds rights to the land.

Pitigliano’s mayor, Pierluigi Camilli, de-scribed the abandoned hotel as a “relic”.

“It is there deteriorating because we can-

not find a way to give it a future,” Camilli said. “When the permits (to develop) were issued it looked like it could boost the lo-cal economy.” Long plagued by low profit-ability, weak governance and high costs, any further risks to the stability of Italy’s banks could hinder the euro zone’s bid to get over a debt crisis that has haunted it since 2009.

A small reduction this year in the bad loans that built up in the downturn has been realised thanks to some lenders managing to sell non-performing loans, the Bank of Italy said, underlining how important these sales are.

TermsAround 66 per cent of Monte dei Paschi’s 10 billion euros in bad debts are secured by property like the Tosteto spa, which it can seize and sell to avoid losses if clients stop paying.

But these guarantees are worth little un-less someone will buy the property.

Sergio Gambassi, the original developer at Tosteto, said he never went bankrupt but Monte dei Paschi changed the terms of the

mortgage and asked for money earlier than he expected.

He said he sold his house by the sea and looked in vain for other funding. “I squeezed myself like a lemon,” he said.

Renzi’s new decree is expected to let creditors seize other assets aside from the property pledged as security for loans, while also trying to help companies avoid crises in the first place.

Pressure to resolve the bad debt problem has mounted this year as bank stocks have plunged 30 per cent. Earlier in April, the government persuaded major banks to set up a fund to buy bad loans and subscribe to cash calls.

The head of the ABI banking association told parliament this month that making credit recovery cheaper and easier would contribute “decisively to launching the market for bad debt”.

An entire section of the decree is dedicat-ed to encouraging banks and their clients to reach agreement before starting litigation, a source close to the matter said.

-REUTERS

Real estate ≥elic that is painful ≥eminde≥ of Italy’s bad debts

ECONOMY Eurozone’s third largest economy is struggling with $227bn loans burden

People outside an Italian bank in Rome. Lenders have been struggling with bad loans. AFP

MONEY & MARKETS GLOBAL

Oil prices edged to new 2016 highs on Friday, lifted by a weak dollar and falling production in the United States, although a looming rise in Middle East output capped gains.

Brent crude futures were trad-ing at $48.30 a barrel up 16 cents from their last close. US crude was up 24 cents at $46.27 a bar-rel, with both contracts hitting fresh 2016 highs.

“The market is coming into better balance and we maintain the view that the current oversup-ply will flip into un-dersupply in 2H,” investment banker Jefferies said on Friday.

“Global spare capacity is now two million barrels per day(bpd), or about two per cent of glo-bal demand. This is a precariously low level,” it added.

Iranian outputBrent and WTI have risen by al-most a third from April troughs and are up over 75 per cent above their 2016 lows, lifted by falling output and a weakening dollar, which has dropped more than six per cent against a basket of other leading currencies this year.

But Deutsche Bank said a looming rise in production by members of the Organisation of the Petroleum Exporting Coun-tries (Opec) - due to climbing Ira-nian output and following outag-es in Iraq, Nigeria and the United Arab Emirates (UAE)- could cap recent oil price rises.

“A sustainable rise in Opec production may be just around the corner, and ... the rally may pause,” the bank said.

“Maintenance in the UAE ... is scheduled to end in April, imply-ing a rise from current produc-tion of 2.73 million bpd to the pre-vious 2.91 million bpd production rate in May,” Deutsche said.

Additionally, Saudi output is expected to edge up by 350,000 barrels to around 10.5 million bpd, sources told Reuters, just as

dozens of tankers filled with unsold oil are cur-rently at sea seeking a buyer.

Economic crisisOne of the main reper-cussions of the global oil price rout between 2014 and early 2016 has been a deep economic crisis in crude export-reliant Venezuela, where po-litical risk consultancy Eurasia Group said the

government faces default as the state runs out of cash to keep its oil pumps running.

“The government needs to invest about $15 billion per year to maintain current production (2.4 million bpd), and mounting problems will probably lead to a decline of 100,000–150,000 bpd this year,” Eurasia Group said.

“Barring a meaningful recov-ery in oil prices or fresh loans from China in the second half of the year, scarce foreign exchange will probably force the state to de-fault later this year, most likely in the fourth quarter,” it added.

-REUTERS

Oil p≥ices hit new highs on low US output,weak dolla≥

An oil rig refinery in southern Iraq. FILE

Maintenance in the UAE ...

is scheduled to end in Ap≥il,

implying a ≥ise f≥om cu≥≥ent p≥oduction

DEUTSCHE BANK

US economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoy-ant labour market.

Gross domestic product (GDP) increased at a 0.5 per cent annual rate, the weakest since the first quarter of 2014, the Labour Depart-ment said on Thursday in its advance esti-mate. Growth was also held back by business-es stepping up efforts to reduce unwanted merchandise clogging up warehouses.

Cheap oil, which has pressured the prof-its of oil field companies like Schlumberger and Halliburton, remained a drag, sending

business spending tumbling at its quickest pace since the second quarter of 2009, when the recession ended.

Lone starAlmost all sectors of the economy weakened in the first quarter, with housing the lone star.

“The economy essentially stalled in the first quarter, but that doesn’t mean it is fal-tering,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Penn-sylvania. “Some of the restraints to growth are dissipating. Growth is likely to accelerate going forward.”

The dollar’s rally is largely over, oil prices appear to be stabilising and the bulk of the

inventory liquidation is out of the way. In addi-tion, the jobs market remains fairly robust.

A separate report from the Labour Depart-ment showed first-time applications for un-employment benefits rose less than expected last week and the four-week average of initial claims fell to its lowest level since 1973.

Employment gainsEmployment gains averaged 209,000 jobs per month in the first quarter. The discon-nect between GDP growth and employment implies productivity remained weak in the first quarter after sinking in the final three months of 2015.-REUTERS

US economy stalls in fi≥st qua≥te≥ as activity weakens

22 BUSINESS DAILY | Monday May 2, 2016

James Omukanda at his fruit stall in Jubi-lee market. Most local apple sellers get their supplies from South Africa and sell each at an average of Sh20, earning a good return. TOM OTIENO

F≥uity businessKisumu

Effective date: 28th April 2016

CommoditiesAgro Commodities Market

Global Commodity Prices Unit Trusts

MSCI Emerging Markets Sector Indices

MARKET DATA

OIL& GAS

AGRO COMMODITIES

SYMBOL CURRENCY LAST NET CHG

100 OZ GOLD USD 1,277.20 11.70

SILVER JPY 61.00 0.00

HG COPPER USC 2.26 0.03

PLATINUM JPY 3,629.00 23.00

ALUMINIUM CNY 12,740.00 120.00

PALLADIUM JPY 2,169.00 35.00

SYMBOL CURRENCY LAST NET CHG

LIGHT CRUDE USD 46.29 0.26

NO 2 HT OIL USD 1.41 0.00

BRENT CRUDE USD 48.26 0.12

GAS OIL USD 420.00 4.75

NATURAL GAS USD 2.06 -0.02

KEROSINE JPY 37,860.00 -300.00

Effective date: 29th April 2016

COMMODITY CURRENCY LAST NET CHNG

SOFTS

SUGAR NO5 USD 461.00 3.30

COFFEE USD 136.50 1.00

COCOA USD 3,170.00 0.00

RUBBER JPY 185.00 -2.00

FROZEN OJ CON1 USC 127.60 3.45

COTTON NO2 USC 63.26 -0.43

GRAINS

CORN USC 386.25 -0.75

MAIZE EUR EUR 158.75 -4.25

WHEAT USC 471.25 -4.25

ROUGH RICE USD 10.76 -0.08

OILSEEDS

SOY BEANS USC 1,010.00 -8.00

SOY BEAN OIL USC 33.15 0.10

CANOLA CAD 498.50 -1.00

PALM OIL MYR 2,264.00 -8.00

METALS & MINING

SOURCE: THOMSON REUTERS

Early Morning wholesale commodity prices Date 29.04.2016.

COMMODITY Unit Kg Nairobi Mombasa Kisumu Nakuru Eldoret Isiolo Embu

CEREAL

Dry Maize Bag 90 2700 2600 3200 2300 2600 2700 1800

Green Maize Ext Bag 115 2000 6000 2600 1800 1350 2000 3450

Finger Millet Bag 90 7000 6300 6800 4950 7200 9000 5000

Sorghum Bag 90 3600 3000 3200 2700 4950 4500 2600

Wheat Bag 90 3300 4500

LEGUMES

Beans Canadian Bag 90 6000 8000 5500 5000

Beans Rosecoco Bag 90 6200 5900 8000 5500 8100 7250

Beans Mwitemania Bag 90 5800 4800 4800 8550 5400 4800

Mwezi Moja Bag 90 5700 4800 8100

Dolichos (Njahi) Bag 90 13500 13950 10800 8100 13500 12000

Green Gram Bag 90 9800 7650 11200 7800 10800 13500 7200

Cowpeas Bag 90 7200 2700 7200 9000 5400 4500 2800

Fresh Peas Bag 51 2800 3500 2500 3500 1785 4080

Groundnuts Bag 110 14000 13200 10000 12100 11250 13500 17000

ROOTS & TUBERS

Red Irish Potatoes Bag 50 3200 2900 3600 3000 2400 2500 3800

White Irish Potatoes Bag 50 3000 3400 3600 3000 2200 3800

Cassava Fresh Bag 99 2200 1700 2200 2300

Sweet Potatoes Bag 98 3200 2800 2500 3500 1600 2200

VEGETABLES

Cabbages Ext Bag 126 1400 2700 1050 1000 1200 1200 3780

Cooking Bananas Med Bunch 22 520 700 250 350 1000 700 230

Ripe Bananas Med Bunch 14 630 400 250 750 560 500 310

Carrots Ext Bag 138 3000 3250 3500 1600 1800 1600 4000

Tomatoes Lg Box 64 5800 8800 7000 3500 5500 7000 3000

Onions Dry net 13 900 850 1040 850 910 1300 750

Spring Onions Bag 142 2800 4000 2500 1000 700 7810

Chillies Bag 38 2000 3000 1500 2500 5320

Kales Bag 50 1250 1200 1400 700 1000 1500 1500

Cucumber Bag 50 2200 2700 3500

Capsicums Bag 50 2600 4000 2800 2500 2000 3500

Brinjals Bag 44 2000 1100 1500 1500 2640

Cauliflower crate 39 2200 2300 3900

Lettuce Bag 51 2200 2500 5100

FRUITS

Passion Fruits Bag 57 5130 5250 3000 5000 2280 8100 7980

Oranges Bag 93 3000 2800 4400 3200 5000 3600

Lemons Bag 95 2700 2100 1600 2700 2500

Mangoes Local Bag 126 2800 1500 2600 3600 2400 4000

Mangoes Ngowe Sm Basket 25 1200 900 2000 500 600

Limes net 13 1170 700

Pineapples Dozen 13 1040 900 640 480 650 1200 1650

Pawpaw Lg Box 54 2200 800 1300 2700 1890 700 1890

Avocado Bag 90 2400 3000 1800 2000 2000 2000 2900

OTHERS

Eggs Tray 47 280 330 290 300 320 330 300

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

NAME LAST NET.CHNG PCT.CHNG OPEN HIGH LOW CLOSE CI-UAE 377.35 11.31 3.09% 377.35 377.35 377.35 366.04 CI-AC AMER. 1,040.05 64.77 6.64% 1,040.05 1,040.05 1,040.05 975.28 CI-ARGENTINA 1,889.40 -70.08 -3.58% 1,889.40 1,889.40 1,889.40 1,959.49 CI-BRIC 477.37 47.45 11.04% 477.37 477.37 477.37 429.93 BRIC 223.46 28.87 14.84% 223.46 223.46 223.46 194.59 BRIC GROWTH 442.62 36.99 9.12% 442.62 442.62 442.62 405.63 BRIC VALUE 368.36 41.93 12.84% 368.36 368.36 368.36 326.43 CI-BAHRAIN 68.93 -6.13 -8.17% 68.93 68.93 68.93 75.06 CI-BRAZIL FREE 1,793.92 248.46 16.08% 1,793.92 1,793.92 1,793.92 1,545.46 CI-CHILE 4,130.18 220.71 5.65% 4,130.18 4,130.18 4,130.18 3,909.48 CI-CHINA FREE 56.56 5.90 11.65% 56.56 56.56 56.56 50.66 CI-COLOMBIA 2,247.26 161.95 7.77% 2,247.26 2,247.26 2,247.26 2,085.32 CI-CZECH REPUBLI 236.74 25.30 11.96% 236.74 236.74 236.74 211.44 CI-EAFE+EM 293.48 10.56 3.73% 293.48 293.48 293.48 282.92 CI-EU 432.45 8.50 2.00% 432.45 432.45 432.45 423.96 CI-EM 45,552.51 3,426.69 8.13% 45,552.51 45,552.51 45,552.51 42,125.82 CI-EGYPT 1,528.19 260.75 20.57% 1,528.19 1,528.19 1,528.19 1,267.44 CI-AC EUROPE 469.41 8.19 1.78% 469.41 469.41 469.41 461.22 CI-C.FE 105.63 5.59 5.58% 105.63 105.63 105.63 100.04 CI-C.FE X JP 476.67 46.81 10.89% 476.67 476.67 476.67 429.86 CI-GOLD DRAGON 147.10 12.47 9.26% 147.10 147.10 147.10 134.63 CI-HUNGARY 1,251.90 161.35 14.80% 1,251.90 1,251.90 1,251.90 1,090.55 CI-INDON. FREE 5,824.29 116.96 2.05% 5,824.29 5,824.29 5,824.29 5,707.33 CI-INDIA 958.45 80.19 9.13% 958.45 958.45 958.45 878.26 CI-JOEG & MA 1,054.34 108.39 11.46% 1,054.34 1,054.34 1,054.34 945.96 CI-KOREA 538.61 27.38 5.36% 538.61 538.61 538.61 511.23 CI-KUWAIT 423.23 3.73 0.89% 423.23 423.23 423.23 419.50 CI-EM L.AMERICA 65,932.57 6,341.42 10.64% 65,932.57 65,932.57 65,932.57 59,591.15 CI-SRI LANKA 554.87 -26.04 -4.48% 554.87 554.87 554.87 580.91 CI-MOROCCO 271.21 11.22 4.31% 271.21 271.21 271.21 259.99 CI-EM E.EUROPE 258.80 15.47 6.36% 258.80 258.80 258.80 243.33 CI-EM FAR EAST 559.59 39.35 7.56% 559.59 559.59 559.59 520.24 CI-EM ASIA 663.17 47.65 7.74% 663.17 663.17 663.17 615.52 CI-EM EUROPE 4,560.39 323.66 7.64% 4,560.39 4,560.39 4,560.39 4,236.74 CI-MEXICO FREE 43,588.79 2,208.25 5.34% 43,588.79 43,588.79 43,588.79 41,380.54 CI-MALAYSIA FREE 600.61 24.44 4.24% 600.61 600.61 600.61 576.17 CI-OMAN 613.44 -15.02 -2.39% 613.44 613.44 613.44 628.46 CI-PERU 1,923.69 254.12 15.22% 1,923.69 1,923.69 1,923.69 1,669.57 CI-AC PAC. 114.31 5.85 5.40% 114.31 114.31 114.31 108.45 CI-PHILIPP.FREE 1,251.01 102.46 8.92% 1,251.01 1,251.01 1,251.01 1,148.56 CI-PAKISTAN 108.71 3.31 3.14% 108.71 108.71 108.71 105.40 CI-POLAND 612.77 91.06 17.46% 612.77 612.77 612.77 521.71 CI-QATAR 810.41 42.20 5.49% 810.41 810.41 810.41 768.21 CI-RUSSIA 834.73 35.23 4.41% 834.73 834.73 834.73 799.50 SOUTH EAST ASIA 721.00 62.06 9.42% 721.00 721.00 721.00 658.94 CI-THAILAND FREE 482.06 25.86 5.67% 482.06 482.06 482.06 456.20 CI-TURKEY 428.03 56.58 15.23% 428.03 428.03 428.03 371.45 CI-TAIWAN 322.42 15.47 5.04% 322.42 322.42 322.42 306.95 CI-ISRAEL 292.37 -10.56 -3.49% 292.37 292.37 292.37 302.93 CI-SOUTH AFRICA 1,347.16 113.26 9.18% 1,347.16 1,347.16 1,347.16 1,233.90

MONEY MARKET FUND CURRENCY DAILY YIELD EFFECTIVE ANNUAL RATE

OLD MUTUAL SH 7.96% 8.25%

BRITISH AMERICAN SH 10.62% 11.15%

UAP SH 5.09% 5.22%

PAN AFRICA PESA+ SH 15.18% 16.39%

CBA SH 9.32% 9.70%

AMANA SH 13.34% 14.18%

EQUITY MONEY MARKET FUND SH 7.67% 7.95%

ICEA SH 7.77% 8.07%

ZIMELE SH 10.34% 10.75%

CIC SH 10.89% 11.35%

STANLIB SH 9.85% 10.30%

APOLLO SH 13.37% 14.35%

NABO USD 99.53 99.53

FIXED INCOME FUND CURRENCY BUY SELL

CIC SH 9.83 10.08

NABO USD 94.12 94.12

BALANCED FUND

OLD MUTUAL SH 149.35 159.03

BRITISH AMERICAN SH 176.61 181.78

PAN AFRICA CHAMA+ SH 11.27 11.62

ZIMELE SH 6.44 6.25

AMANA SH 128.61 128.61

EQUITY BALANCED FUND FUND SH 102.98 100.96

ICEA SH 124.57 131.13

STANLIB SH 127.30 127.30

CIC SH 12.09 12.68

APOLLO SH 104.89 100.86

NABO USD 99.91 99.91

EQUITIES FUND

OLD MUTUAL SH 358.89 384.54

OLD MUTUAL EA FUND SH 144.06 152.46

BRITISH AMERICAN SH 182.42 188.22

CBA SH 147.95 147.95

AMANA SH 127.69 127.69

STANLIB SH 161.27 161.27

ICEA SH 130.99 137.88

CIC SH 13.02 13.71

NABO USD 94.15 94.15

BOND FUND

OLD MUTUAL SH 98.19 100.52

BRITISH AMERICAN SH 133.44 136.16

UAP SH 11.83 11.83

STANLIB B1 SH 100.47 100.47

STANLIB A SH 100.06 100.06

PAN AFRICA PATA+ SH 9.66 9.96

ICEA SH 96.10 97.07

23Monday May 2, 2016 | BUSINESS DAILY

Yuan, dolla≥ ≥ate in biggest ≥ise in 11 yea≥sChina on Friday raised the exchange rate for the yuan currency against the US dollar by 0.56 per cent from the previous day, the biggest increase in almost 11 years.

The People’s Bank of China (PBoC) fixed the yuan at 6.4589 to the green-back, according to the China Foreign Exchange Trade System, which oper-ates the national foreign exchange market.

It was the strongest daily increase in the rate since July 2005, Bloomberg News reported.

China only allows the yuan to rise or fall two per cent on either side of the daily fix, to prevent volatility and maintain control over the currency.

“This is a reaction to the dollar weakness overnight and there’s not much in the way of policy intention to read into,” Ken Cheung, Hong Kong-based currency strategist at Mizuho Bank, said.

PlungeThe US dollar plunged against the Jap-anese yen on Thursday, after the Bank of Japan shocked markets by refrain-ing from ramping up its stimulus.

“The expectation for a stronger yuan fix was laid by the gains for the yen after the Bank of Japan announce-ment,” Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong, said.

On Friday, the onshore yuan was quoted at 6.4729 to the dollar, up 0.14 per cent from the previous day.

China rattled global investors with a surprise devaluation in Au-gust, when it guided the normally stable unit down nearly five per cent in a week.

Selling Meanwhile hundreds of employees at China’s top statistics bureau are being investigated after selling data, the government said, despite long-standing doubts over the reliability of official figures.

More than 300 NBS staff have also been asked to return 3.23 million yuan ($500,000) they made by selling an-nual reports and providing data to af-filiates, the Central Commission for Discipline Inspection (CCDI) — the Communist party’s internal corrup-tion watchdog — said on its website.

The news comes just months after the former head of the NBS was sacked in a corruption investigation — an-nounced shortly after he appeared at a briefing on China’s economy when he reiterated that the country’s gross domestic product calculations were reliable. -AFP

MARKET DATA

Tracking the markets: Benchmark Index (Latest Data) Africa

World

Africa USE All Share Uganda

1,776.00 1.31%

RSE All ShareRwanda

130.50 0.00%

NGSE All shareNigeria

24,771.04 -0.21%

NikkeiTokyo

17,290.49 -0.36%

FTSE 100Europe

2,696.41 -0.04%

SensexMumbai

26,064.12 0.22%

Dow JonesNew York

17,990.32 0.07%

HangSeng Hongkong

21,361.60 -0.21%

JSE All Share Index South Africa

53,062.95 0.15%

Oct‘15 Apr ‘16

-

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

EPSDPSDiv Yield

HFKenya

I&MKenya

EvereadyKenya

EA CablesKenya

LibertyKenya

TranscenturyKenya

BarclaysKenya

NBKKenya

Kenya REKenya

StanchartKenya

7.15-4.03%

-2.21-3.24

0.00%

2.504.17%

13.568.11

2.64%

110.002.80%

21.502.38%

14.80-1.00%

19.979.56

8.90%

191.00-5.91%

1.3710.80

0.00%

4.65-6.06%

9.10-1.09%

-3.84-2.37

0.00%

19.950.76%

1.557.06

9.13%

10.950.00%

4.904.07

3.76%

3.436.27

6.05%

2.800.89

0.00%

-8.53-0.55

0.00%

MOVERS & LOSERS YTD

Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16

Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16 Jan’16 Apr‘16

Oct‘15 Apr ‘16 Oct‘15 Apr ‘16 Oct‘15 Apr ‘16 Oct‘15 Apr ‘16

Oct‘15 Apr ‘16 Oct‘15 Apr ‘16 Oct‘15 Apr ‘16 Oct‘15 Apr ‘16 Oct‘15 Apr ‘16

DSE All shareTanzania

2,5051.51%

24 BUSINESS DAILY | Monday May 2, 2016

NAME LOCATION LAST NET.CHNG PCT.CHNG OPEN HIGH LOW CLOSE

NSE 20 - SHR IDX KENYA 4,009.26 19.06 0.48% 4,009.26 4,009.26 4,009.26 3,990.20

NSE 25 KENYA 4,254.86 15.03 0.35% 4,254.86 4,254.86 4,254.86 4,239.83

ALL SHARE INDEX ZAMBIA 5,010.75 -4.07 -0.08% 5,010.87 5,014.82 5,010.87 5,014.82

ALL SHARE INDE/D SOUTHAFRICA 52,919.69 -304.29 -0.57% 53,094.83 53,133.79 52,858.07 53,223.98

ALSIUG UGANDA 1,785.00 13.00 0.73% 1,785.00 1,785.00 1,785.00 1,772.00

ZSE INDUSTRIAL ZIMBABWE 105.79 3.04 2.96% 105.79 105.79 105.79 102.75

CFG INDEX MOROCCO 21,199.41 342.21 1.64% 20,859.42 21,212.07 20,843.95 20,857.20

MALAWI ALL SHR MALAWI 12,861.07 0.00 0.00% 12,861.07 12,861.07 12,861.07 12,861.07

NSE ALL SHARE/D NIGERIA 25,114.78 157.70 0.63% 24,957.08 25,164.14 24,951.08 24,957.08

DSE ALL SHR IDX TANZANIA 2,559.31 12.99 0.51% 2,559.31 2,559.31 2,559.31 2,546.32

EGX 30 IDX/D EGYPT 7,773.23 -90.35 -1.15% 7,761.13 7,773.23 7,702.22 7,863.58

TUN MAIN INDEX TUNISIA 5,356.58 24.52 0.46% 5,332.10 5,361.08 5,332.10 5,332.06

RSE ALLSHARE IND RWANDA 130.50 0.00 0.00% 130.50 130.50 130.50 130.50

NSE 20 Share Index 4,009.26 0.48%

African Indices

Losers

Active Counters

Gainers

MARKET UPDATES

Nairobi Stocks

Nairobi

NSE 25 Share Index 4,254.86 0.35%

All Share Index (NASI) 146.93 0.25%Nairobi

Nairobi

Nairobi

Nairobi

Nairobi

Oct‘15 Apr16

Oct ‘15 Apr’16

Oct ‘15 Apr’16

GEMS AIMS

Weekly Share Report

MARKET DATA

Price fri Price fri net %

Counter Last Fri Prev Fri Change change

ARM Cement ltd 35.00 32.50 2.50 7.69%

I&M Holdings 112.00 105.00 7.00 6.67%

Eaagads AIMS 24.50 23.00 1.50 6.52%

Liberty Kenya 15.95 15.00 0.95 6.33%

KQ 4.30 4.05 0.25 6.17%

Price fri Price fri net % Counter Last Fri Prev Fri Change change

Stan. Chart. 193.00 249.00 -56.00 -22.49%

Transcentury AIMS 4.45 5.50 -1.05 -19.09%

Express (K) AIMS 3.85 4.45 -0.60 -13.48%

Uchumi 4.00 4.50 -0.50 -11.11%

Atlas Dev. 1.35 1.50 -0.15 -10.00%

Price fri Price fri % Total Shares

Counter Last Fri Prev Fri Change Traded

Safaricom 17.10 17.10 0.00% 36,518,200

KCB 41.50 42.50 -2.35% 7,402,100

KenolKobil 10.55 10.90 -3.21% 6,741,500

Mumias 1.35 1.30 3.85% 5,130,400

Equity 40.00 40.50 -1.23% 3,694,700

WEEKLY SHARES SHARES EPS DPS TOTAL

52 WK 52 WK YTD PRICE (KSH) PRICE (KSH) PRICE TRADED ISSUED MKT CAP. LATEST P / E P/B LATEST DIVIDEND

HIGH LOW % APR-29-2016 APR-22-2016 CHANGE LAST WEEK KSHS MN 12MNTH TRAILING TRAILING 12MNTH YIELD

AGRICULTURAL

EAAGADS AIMS 38.50 18.10 -8.41% 24.50 23.00 6.52% 8,100 32,157,000 787.85 0.25 98.00 1.96 0.00 0.00%

KAKUZI 383.00 255.00 -4.42% 303.00 305.00 -0.66% 2,300 19,599,999 5,938.80 26.92 11.26 2.05 5.00 1.65%

KAPCHORUA TEA AIMS 242.00 86.00 -55.00% 90.00 88.50 1.69% 600 7,824,000 704.16 -5.82 -15.46 0.26 5.00 5.56%

LIMURU TEA AIMS 1248.00 681.00 -26.36% 799.00 799.00 0.00% - 1,800,000 1,438.20 1.22 - 3.89 1.00 0.13%

SASINI 23.25 14.00 -5.63% 18.45 18.60 -0.81% 527,500 228,055,500 4,207.62 2.21 8.35 0.32 1.25 6.78%

WILLIAMSON TEA AIMS 435.00 162.00 -55.47% 171.00 182.00 -6.04% 14,800 17,512,640 2,994.66 23.77 7.19 0.24 40.00 23.39%

AUTOMOBILES & ACCESSORIES

CAR & GEN 50.00 34.00 -13.92% 34.00 34.00 0.00% - 40,103,308 1,363.51 0.76 44.74 0.65 0.00 0.00%

MARSHALLS 13.50 8.20 -37.88% 8.20 8.25 -0.61% 32,100 14,393,106 118.02 -11.90 -0.69 0.30 0.00 0.00%

SAMEER 6.00 3.00 -16.00% 3.15 3.15 0.00% 93,400 278,342,393 876.78 -0.06 -52.50 0.38 0.00 0.00%

BANKING

BARCLAYS 16.80 10.15 -19.49% 10.95 10.95 0.00% 3,177,300 5,431,536,000 59,475.32 1.55 7.06 1.84 1.00 9.13%

CFC STANBIC 129.00 71.00 12.73% 93.00 93.50 -0.53% 16,800 395,321,638 36,764.91 12.41 7.49 1.59 6.15 6.61%

DTBK 244.00 176.00 6.95% 200.00 206.00 -2.91% 166,700 220,100,096 44,020.02 19.80 10.10 1.66 2.50 1.25%

EQUITY 51.00 36.50 0.00% 40.00 40.50 -1.23% 3,694,700 3,773,674,802 150,946.99 4.59 8.71 2.19 2.00 5.00%

HF 38.00 18.80 -3.37% 21.50 20.25 6.17% 510,800 352,416,667 7,576.96 3.43 6.27 0.83 1.30 6.05%

I&M HOLDINGS 139.00 95.00 12.00% 112.00 105.00 6.67% 908,900 392,362,039 43,944.55 13.56 8.26 2.01 2.90 2.59%

KCB 65.50 37.00 -5.14% 41.50 42.50 -2.35% 7,402,100 3,025,219,832 125,546.62 6.49 6.39 1.62 2.00 4.82%

NBK 24.50 8.00 -41.90% 9.15 9.20 -0.54% 278,900 308,000,000 2,818.20 -3.84 -2.38 0.21 0.00 0.00%

NIC BANK 61.00 35.00 -13.29% 37.50 39.50 -5.06% 650,000 639,945,603 23,997.96 6.86 5.47 1.06 1.25 3.33%

STAN. CHART. 355.00 183.00 -1.03% 193.00 249.00 -22.49% 45,200 309,159,514 59,667.79 19.97 9.66 1.42 17.00 8.81%

CO-OP BANK 23.00 15.85 8.89% 19.60 19.45 0.77% 1,065,800 4,889,316,295 95,830.60 2.14 9.16 2.19 0.80 4.08%

COMMERCIAL

ATLAS DEV.GEMS 12.10 1.35 -35.71% 1.35 1.50 -10.00% 1,325,300 1,497,370,885 2,021.45 -3.58 -0.38 0.00 0.00%

EXPRESS (K) AIMS 6.00 3.70 -14.44% 3.85 4.45 -13.48% 40,500 35,403,790 136.30 -2.18 -1.77 0.69 0.00 0.00%

HUTCHINGS BIEMER - - 0.00% 20.25 20.25 0.00% - 360,000 7.29 -18.34 -1.10 - 0.00 0.00%

KQ 7.95 4.00 -12.24% 4.30 4.05 6.17% 3,171,700 1,496,469,035 6,434.82 -13.35 -0.32 1.20 0.00 0.00%

LONGHORN PUBLISHERS AIMS 8.70 3.70 1.11% 4.55 4.70 -3.19% 262,400 243,750,000 1,109.06 7.00 0.65 0.61 0.15 3.30%

NATION MEDIA 245.00 130.00 -8.90% 174.00 168.00 3.57% 9,400 188,542,286 32,806.36 11.80 14.75 3.71 10.00 5.75%

STANDARD GRP 40.50 24.50 6.25% 29.75 28.75 3.48% 17,800 81,731,808 2,431.52 2.95 10.08 1.17 0.00 0.00%

TPS EA 38.50 22.50 -6.00% 23.50 25.00 -6.00% 16,900 182,174,108 4,281.09 1.63 14.42 0.39 1.35 5.74%

UCHUMI 11.50 4.00 -63.47% 4.00 4.50 -11.11% 113,200 364,959,616 1,459.84 -10.85 -0.37 0.36 0.00 0.00%

WPP SCANGROUP 50.00 22.50 -20.00% 24.00 26.00 -7.69% 10,600 378,865,102 9,092.76 1.12 21.43 1.00 0.00 0.00%

CONSTRUCTION & ALLIED

ARM CEMENT LTD 83.00 28.00 -16.17% 35.00 32.50 7.69% 442,100 495,275,000 17,334.63 3.01 11.63 1.56 0.60 1.71%

BAMBURI 200.00 135.00 8.00% 189.00 189.00 0.00% 32,100 362,959,275 68,599.30 14.49 13.04 2.28 13.00 6.88%

CROWN BERGER 187.00 50.00 -18.03% 50.00 50.00 0.00% 3,800 71,181,000 3,559.05 9.01 5.55 0.87 1.75 3.50%

EA CABLES 17.00 5.90 -32.55% 7.15 7.15 0.00% 267,000 253,125,000 1,809.84 -2.21 -3.24 0.75 0.00 0.00%

EAPC 65.00 38.25 -16.58% 39.00 40.00 -2.50% 7,800 90,000,000 3,510.00 79.52 0.49 0.73 0.00 0.00%

ENERGY & PETROLEUM

KENGEN 11.65 5.40 20.42% 8.55 8.70 -1.72% 1,230,900 2,198,361,456 18,795.99 5.24 1.63 0.21 0.65 7.60%

KENOLKOBIL 11.60 7.55 9.90% 10.55 10.90 -3.21% 6,741,500 1,471,761,200 15,527.08 1.37 7.70 2.20 0.35 3.32%

KENYA POWER 18.50 10.15 -12.88% 11.50 11.00 4.55% 873,500 1,951,467,045 22,441.87 3.81 3.02 0.44 0.30 2.61%

TOTAL 26.25 16.20 0.82% 18.40 18.50 -0.54% 22,800 175,028,706 3,220.53 2.57 7.16 0.21 0.77 4.18%

UMEME 24.00 16.00 -22.25% 17.30 17.50 -1.14% 3,387,900 1,623,878,005 28,093.09 1.34 12.91 2.02 0.90 5.20%

INSURANCE

BRITISH AMERICAN 27.00 10.00 1.92% 13.25 13.30 -0.38% 759,500 1,938,415,838 25,684.01 1.31 10.11 1.24 0.30 2.26%

CIC INSURANCE 10.10 5.20 -14.52% 5.30 5.25 0.95% 799,300 2,615,538,528 13,862.35 0.43 12.33 1.90 0.10 1.89%

JUBILEE 600.00 384.00 -2.89% 470.00 470.00 0.00% 19,000 59,895,000 28,150.65 42.70 11.01 1.75 8.50 1.81%

KENYA RE 22.75 15.45 -7.14% 19.50 19.70 -1.02% 463,200 699,949,068 13,649.01 4.90 3.98 0.64 0.75 3.85%

LIBERTY KENYA 28.00 14.00 -18.21% 15.95 15.00 6.33% 145,100 535,707,499 8,544.53 1.37 11.64 1.46 0.00 0.00%

PAN AFRICA 128.00 36.00 -23.33% 46.00 43.75 5.14% 6,500 144,000,000 6,624.00 -0.43 -106.98 1.32 0.00 0.00%

INVESTMENT

CENTUM INVEST. 68.00 40.00 -3.76% 44.75 45.75 -2.19% 1,426,600 665,441,775 29,778.52 10.44 4.29 0.91 0.00 0.00%

HOME AFRICA GEMS 3.65 1.20 -40.38% 1.55 1.55 0.00% 656,100 405,255,320 628.15 -0.04 -38.75 - 0.00 0.00%

KURWITU VENTURES LTD GEMS 1500.00 1500.00 0.00% 1500.00 1500.00 0.00% - 102,272 153.41 -114.00 -13.16 0.00 0.00%

OLYMPIA 6.00 3.60 -20.83% 3.80 3.75 1.33% 4,200 40,000,000 152.00 -1.04 -3.65 0.19 0.00 0.00%

TRANSCENTURY AIMS 18.80 4.35 -46.06% 4.45 5.50 -19.09% 55,600 280,284,476 1,247.27 -8.53 -0.52 0.34 0.00 0.00%

INVESTMENT SERVICES

NAIROBI SECURITIES EXCHG 30.25 18.00 10.10% 27.25 27.25 0.00% 272,600 194,625,000 5,303.53 1.57 17.36 3.41 0.49 1.80%

MANUFACTURING & ALLIED

A. BAUMANN AIMS - - 0.00% 11.10 11.10 0.00% - 3,840,066 42.62 -2.02 -5.50 - 0.00 0.00%

BOC GASES 140.00 90.00 -8.82% 93.00 98.00 -5.10% 100,100 19,525,446 1,815.87 7.61 12.22 1.04 5.20 5.59%

BAT KENYA 869.00 670.00 8.15% 849.00 842.00 0.83% 25,000 100,000,000 84,900.00 49.76 17.06 11.13 49.50 5.83%

CARBACID 22.00 12.80 -7.98% 15.00 14.45 3.81% 285,500 254,851,988 3,822.78 1.55 9.68 2.31 0.70 4.67%

EABL 340.00 245.00 8.79% 297.00 283.00 4.95% 774,000 790,774,356 234,859.98 11.31 26.26 7.31 6.00 2.02%

EVEREADY EA 4.95 2.35 -9.26% 2.45 2.65 -7.55% 58,400 210,000,000 514.50 2.80 0.88 1.59 0.00 0.00%

FLAME TREE GEMS 10.20 5.70 8.57% 7.60 7.60 0.00% 34,500 161,866,804 1,230.19 1.36 5.59 3.06 0.00 0.00%

K. ORCHARDS AIMS 110.00 97.00 -1.02% 97.00 97.00 0.00% - 12,868,124 1,248.21 0.33 293.94 -54.80 0.00 0.00%

MUMIAS 2.50 1.30 -15.63% 1.35 1.30 3.85% 5,130,400 1,530,000,000 2,065.50 -3.04 -0.44 0.16 0.00 0.00%

UNGA 50.00 30.50 9.63% 37.00 35.25 4.96% 9,700 75,708,873 2,801.23 5.27 7.02 0.60 1.00 2.70%

TELECOMMUNICATION & TECHNOLOGY

SAFARICOM 17.90 12.60 4.91% 17.10 17.10 0.00% 36,518,200 40,065,428,000 685,118.82 0.80 21.38 6.50 0.64 3.74%

REAL ESTATE INVESTMENT TRUST

STANLIB FAHARI I-REIT 23.75 19.00 21.75 20.50 6.10% 130,700 180,972,300 3,936.15 0.00 0.00 0.00%

25Monday May 2, 2016 | BUSINESS DAILY

Equities & BondsShare Price Performance Scorecard Weekly Kenya Treasury and Infrastructure Bonds

MARKET DATA

BONDS LISTED AT THE NAIROBI SECURITIES EXCHANGE APRIL 29, 2016

ISSUE MATURITY ISSUED COUPON AVG TRADED TOTAL VALUE NUMBER OF

DATE DATE VALUE IN MNS (%) YIELD (%) (KSH) TRADES

ISSUE NO.

ONE YEAR BONDS

FXD 1/2015/1YR 29-09-15 26-09-16 24,260.65 19.062 10.5127 13,150,000 2

FXD 2/2015/1YR 26-10-15 24-10-16 20,482.75 22.954

TWO YEAR BONDS

FXD 1/2014/2YR 24-03-14 21-03-16 19,976.40 10.803

FXD 2/2014/2YR 26-05-14 23-05-16 20,130.15 10.793

FXD 3/2014/2YR 25-05-15 19-12-16 29,375.70 10.890 12.5000 4,000,000 1

FXD 1/2015/2YR 23-02-15 20-02-17 23,592.15 11.470

FXD 2/2015/2YR 29-06-15 26-06-17 18,746.80 12.629 12.1613 250,000 1

FXD 1/2016/2YR 25-01-16 22-01-18 20,153.75 15.760 10.7750 1,468,800,000 6

FIVE YEAR BONDS

FXD 1/2012/5YR 28-05-12 22-05-17 31,079.55 11.855 12.1758 3,600,000 2

FXD 1/2013/5YR 29-04-13 23-04-18 20,240.75 12.892 10.5512 800,350,000 5

FXD 2/2013/5YR 1-07-13 25-06-18 26,340.05 11.305 12.6933 1,200,000 2

FXD 3/2013/5YR 25-11-13 19-11-18 14,937.80 11.952 13.3147 300,000 1

FXD 1/2014/5YR 28-04-14 22-04-19 25,733.70 10.870 11.4680 15,900,000 5

FXD 2/2014/5YR 23-06-14 17-06-19 16,418.25 10.934 13.6220 950,000 1

FXD 1/2015/5YR 29-06-15 22-06-20 30,956.05 13.193 13.8427 1,000,650,000 7

FXD 2/2015/5YR 30-11-15 23-11-20 30,673.85 13.920 13.7946 2,100,700,000 10

FXD 1/2016/5YR 25-04-16 19-04-21 19,545.57 14.334 13.3966 2,684,700,000 27

TEN YEAR BONDS

FXD1/2006/10YR 27-03-06 14-03-16 3,451.05 14.000

FXD2/2006/10YR 29-05-06 16-05-16 5,028.10 14.000

FXD1/2007/10YR 29-10-07 16-10-17 9,308.80 10.750 12.4194 150,000 1

FXD1/2008/10YR 29-10-07 12-02-18 2,992.75 10.750

FXD2/2008/10YR 28-07-08 16-07-18 13,504.70 10.750

FXD3/2008/10YR 29-09-08 17-09-18 4,151.60 10.750 12.6250 160,000,000 1

FXD1/2009/10YR 27-09-09 15-04-19 4,966.85 10.750 13.5381 150,000 1

FXD1/2010/10YR 26-04-10 13-04-20 19,394.15 8.790 14.4413 5,500,000 3

FXD2/2010/10YR 1-11-10 19-10-20 18,849.90 9.307 12.4308 9,050,000 3

FXD1/2012/10YR 30-06-12 13-06-22 35,273.50 12.300 14.2826 1,900,000 1

FXD1/2013/10YR 1-07-13 19-06-23 35,273.70 12.371 14.2065 1,102,300,000 11

FXD1/2014/10YR 25-05-15 15-01-24 35,852.15 12.180 14.542 600,000 1

ELEVEN YEAR BONDS

FXD1/2006/11YR 25-09-06 11-09-17 4,031.40 13.750

TWELVE YEAR BONDS

FXD1/2006/12YR 28-08-06 13-08-18 3,900.95 14.000

FXD1/2007/12YR 28-05-07 13-05-19 4,864.60 13.000

FIFTEEN YEAR BONDS

FXD1/2007/15YR 26-03-07 7-03-22 3,654.60 14.500

FXD2/2007/15YR 25-06-07 6-06-22 7,236.95 13.500

FXD3/2007/15YR 26-11-07 7-11-22 18,030.20 12.500 14.3332 50,000 1

FXD1/2008/15YR 31-03-08 13-03-23 7,830.90 12.500

FXD1/2009/15YR 26-10-09 7-10-24 9,420.45 12.500

FXD1/2010/15YR 29-03-10 10-03-25 22,336.25 10.250 14.6645 300,000 1

FXD2/2010/15YR 27-12-10 8-12-25 13,513.10 9.000

FXD1/2012/15YR 24-09-12 6-09-27 21,089.45 11.000 800,000 2

FXD1/2013/15YR 25-02-13 7-02-28 42,138.45 11.250 14.8738 700,000 1

FXD2/2013/15YR 29-04-13 10-04-28 17,385.85 12.000 14.2175 580,550,000 9

TWENTY YEAR BONDS

FXD1/2008/20YR 30-06-08 5-06-28 20,360.95 13.750

FXD1/2011/20YR 30-05-11 5-05-31 9,365.80 10.000 14.7430 2,950,000 2

FXD1/2012/20YR 26-11-12 1-11-32 44,581.65 12.000 14.6947 2,650,000 2

TWENTY FIVE YEAR BOND

FXD1/2010/25YR 28-06-10 28-05-35 20,192.40 11.250

THIRTY YEAR BOND

SDB 1/2011/30YR 28-02-11 21-01-41 28,144.70 12.000 14.6345 343,100,000 9

INFRASTRUCTURE BONDS

IFB 1/2011/12YR 3-10-11 18-09-23 43,447.35 12.000 12.4468 17,050,000 3

IFB 1/2009/12YR 23-02-09 8-02-21 19,726.85 12.500 13.5405 1,140,000 1

IFB 2/2009/12YR 7-12-09 22-11-21 18,897.65 12.000 12.9120 1,550,000 1

IFB 1/2010/8YR 1-03-10 19-02-18 15,908.05 9.750

IFB 2/2010/9YR 30-08-10 19-08-19 32,871.55 6.000 12.1229 190,000,000 1

IFB 1/2013/12YR 30-09-13 15-09-25 38,841.68 11.000 12.3691 1,700,000 1

IFB 1/2014/12YR 27-10-14 12-10-26 35,480.90 11.000 11.5051 18,100,000 3

IFB 1/2015/12YR 30-03-15 15-03-27 51,192.20 11.351 12.3928 549,000,000 34

Weekly Corporate Bonds APRIL29, 2016 BONDS LISTED AT THE NAIROBI SECURITIES EXCHANGE ISSUE MATURITY ISSUED VALUE COUPON TOTAL VALUE NUMBER OF DATE DATE IN MILLIONS (%) (KSH) TRADES CENTUM BOND SENIOR UNSECURED FIXED RATE AND EQUITY LINKED NOTES CTNB.BD.18.09.17/13.50 26-09-12 18-09-17 2,917.10 13.500 CTNB.BD.18.09.17/12.75 26-09-12 18-09-17 1,250.80 12.750 CTNB.BD.08.06.20/13 15-06-15 8-06-20 3,899.22 13.000 CTNB.BD.08.06.20/12.5 15-06-15 8-06-20 2,100.77 12.500 CTNB.BD.08.06.20/12.5V 15-06-15 8-06-20 2,100.77 CONSOLIDATED BANK OF KENYA LTD MEDIUM TERM NOTE PROGRAMME CON.BD-FXD(SN)/2012/7YR 30-06-12 24-07-19 1480.60 13.250 CON.BD-FXD(SBN)/2012/7YR 30-06-12 24-07-19 1965.00 13.600 CON.BD-FR(SN)/2012/7YR 30-06-12 24-07-19 1.00 SHELTER AFRIQUE MEDIUM TERM UNSECURED NOTES FXD (SHELTER AFRIQUE) /2013/5YR 30-09-13 28-09-18 4,239.70 12.750 FR (SHELTER AFRIQUE) /2013/5YR 30-09-13 28-09-18 760.30 11.000 MRM FR (MRM) 2008/8YR 27-10-08 3-01-17 13,785 FXD (MRM) 2008/8YR 27-10-08 3-01-17 6,215 13.000 CFC STANBIC BANK SENIOR & SUBORDINATED BOND ISSUE FR (CFC STANBIC) 2009/7YR 7-07-09 7-07-16 9,790 FXD (CFC STANBIC) 2009/7YR 7-07-09 7-07-16 24,020 12.500 10,000,000 1KENGEN PUBLIC INFRASTRUCTURE BOND OFFER 2019 FXIB 1/2009/10YR 2-11-09 31-10-19 15,625.00 12.500 HOUSING FINANCE MEDIUM TERM NOTE FXD (HFCK) 02/2012/7YR 2ND TRANCHE 22-10-12 14-10-19 2,969.10 13.000 FR (HFCK) 2010/7YR 26-10-10 2-10-17 1,167 FXD (HFCK) 2010/7YR 26-10-10 2-10-17 5,864 8.500 I&M MEDIUM TERM NOTE FRN I&M-01/13/5.25 13-12-13 8-03-19 3,429 (182+2%) FXD I&M-01/13/5.25 13-12-13 8-03-19 226 12.800 BRITAM MEDIUM TERM NOTE BRTB.BD.22/07/19-0037-13 22-07-14 15-07-19 6,000 13.000 UAP HOLDINGS MEDIUM TERM NOTE UAP.BD.22.07.2019 28-07-14 22-07-19 2000.00 13.000 NIC MEDIUM TERM NOTE NIC.BD.09/09/19-0039-12.5 8-09-14 9-09-19 5514.00 12.500 CIC INSURANCE GROUP LTD. MEDIUM TERM NOTE CIC.BD.2.10.2019 8-10-14 2-10-19 5000.00 13.000 CFC BANK MULTICURRENCY FIXED MEDIUM TERM NOTE CFCB.BD.08/12/21-0042-12.95 15-12-14 8-12-21 5080.00 12.950 CBA FIXED MEDIUM TERM NOTE CBAB.BD.14/12/20-0041-12.75 22-12-14 14-12-20 7000.00 12.750 EABL FIXED MEDIUM TERM NOTE EABB.BD.19/03/18-0043-12.25 23-03-15 19-03-18 5000.00 12.250 CHASE BANK FIXED MEDIUM TERM NOTE CHBD.BD.02/06/22-0044-13.5 10-06-15 2-06-22 4822.40 13.250 REAL PEOPLE MEDIUM TERM NOTE RPBD.BD.06/08/18-0046-13.65 10-08-15 6-08-18 270.30 13.650 RPBD.BD.03/08/20-0047-13.65 10-08-15 3-08-20 1363.90 13.650 FAMILY BANK MEDIUM TERM NOTE FBKB.BD.19/04/21-0049-13.75 26-10-15 19-04-21 1297.10 13.750 FBKB.BD.19/04/21-0051-2.5 26-10-15 19-04-21 600.70 (182+2.5) FBKB.BD.19/04/21-0050-14 26-10-15 19-04-21 121.00 14.000

SCORECARD AS AT 29TH APRIL 2016 NAME PREVIOUS CLOSE % 1D % 5D % 1M % 3M % 6M % 1YA BAUMANN 11.10 11.10 0.00 0.00 0.00 0.00 0.00 0.00ATLAS DEVPNT & SPPRT SERV 1.40 1.35 -3.57 -10.00 -3.57 -25.00 -38.64 -87.44ATHI RIVER MINING 34.25 35.00 2.19 7.69 16.67 4.48 -3.45 -53.95BAMBURI 189.00 189.00 0.00 0.00 -0.53 9.25 18.13 26.00BARCLAYS KEN 11.00 10.95 -0.45 0.00 -9.88 -11.69 -13.78 -30.25BAT KENYA 835.00 849.00 1.68 0.83 0.00 6.13 10.40 17.43BOC KENYA 93.00 93.00 0.00 -5.10 -2.11 1.64 -15.45 -31.11BRITISH AMERICAN 13.20 13.25 0.38 -0.38 26.19 10.88 -17.19 -36.90CAR & GENERAL 34.00 34.00 0.00 0.00 -2.16 -13.92 -13.92 -30.26CARBACID INV 14.50 15.00 3.45 3.81 1.01 0.33 5.26 -26.83CENTUM INV 45.00 44.75 -0.56 -2.19 0.00 -2.19 5.29 -30.08CFC STANBIC BANK 93.50 93.00 -0.53 -0.53 -2.62 16.98 14.81 -25.00CIC INSURANCE 5.25 5.30 0.95 0.95 -7.02 -1.85 -17.19 -42.70CO-OP BANK 19.10 19.60 2.62 0.77 -5.54 18.43 15.29 -3.21CROWN BERGER 54.50 50.00 -8.26 0.00 -12.28 -11.50 -20.00 -50.98DIAMOND KEN 190.00 200.00 5.26 -2.91 -5.21 6.38 5.26 -13.04EA CABLES 6.55 7.15 9.16 0.00 -2.72 -20.56 -30.92 -54.60EA PORT CEM 40.00 39.00 -2.50 -2.50 -13.33 -22.00 -13.33 -28.44EAAGADS 25.00 24.50 -2.00 6.52 0.00 2.08 -4.85 -30.00EA AFR BREW 296.00 297.00 0.34 4.95 5.69 12.08 8.39 -7.19EQUITY BANK 40.00 40.00 0.00 -1.23 0.00 3.90 -10.61 -19.19EVEREADY EA 2.50 2.45 -2.00 -7.55 -12.50 -20.97 -2.00 -40.96EXPRESS KEN 4.10 3.85 -6.10 -13.48 -9.41 -3.75 -8.33 -31.25FLAME TREE HLDNGS 7.95 7.60 -4.40 0.00 8.57 10.14 32.17 -11.11G WILLIAMSON 180.00 171.00 -5.00 -6.04 -7.57 -8.56 -52.10 -38.93HUTCHINGS BIEMER 20.25 20.25 0.00 0.00 0.00 0.00 0.00 0.00HOME AFRICA LIMITED 1.55 1.55 0.00 0.00 -18.42 -18.42 3.33 -50.00HOUSING FIN 21.25 21.50 1.18 6.17 3.61 7.77 4.88 -36.30I&M HOLDING 112.00 112.00 0.00 6.67 8.74 14.29 15.46 -17.60JUBILEE HLDS 471.00 470.00 -0.21 0.00 -0.63 1.73 13.53 -21.40KAKUZI 303.00 303.00 0.00 -0.66 -0.66 1.00 1.00 16.99KAPCHORUA 86.50 90.00 4.05 1.69 0.00 -45.12 -49.72 -28.00KEN ORCHARDS 97.00 97.00 0.00 0.00 0.00 0.00 -1.02 -11.82KENGEN 8.55 8.55 0.00 -1.72 12.50 42.50 -2.29 -14.07KENYA AIRWAYS 4.00 4.30 7.50 6.17 -3.37 -9.47 -18.10 -39.86KENYA COM BK 41.50 41.50 0.00 -2.35 -1.19 8.50 2.47 -33.06KENOLKOBIL 10.80 10.55 -2.31 -3.21 -7.86 17.22 21.97 15.93KENYA POWER 11.70 11.50 -1.71 4.55 4.55 -0.86 -26.05 -32.55KENYA RE 19.60 19.50 -0.51 -1.02 -1.76 -1.27 -4.88 8.64KURWITU 1500.00 1500.00 0.00 0.00 0.00 0.00 0.00 0.00LIBERTY HOLDINGS 15.90 15.95 0.31 6.33 -2.45 -9.63 -16.49 -32.84LIMURU TEA 799.00 799.00 0.00 0.00 0.00 -9.51 -26.36 -16.07LONGHORN 4.30 4.55 5.81 -3.19 -14.15 -8.08 -4.21 -41.29MARSHALL 8.20 8.20 0.00 -0.61 -27.11 -37.88 -34.40 -31.67MUMIAS SUGAR 1.35 1.35 0.00 3.85 -6.90 -18.18 -15.63 -34.15NAIROBI SECURITIES 27.00 27.25 0.93 0.00 -0.91 18.48 18.48 39.39NATION MEDIA 174.00 174.00 0.00 3.57 -1.14 0.00 29.85 -23.01NATL BANK KEN 9.00 9.15 1.67 -0.54 -36.68 -43.87 -42.09 -59.33NIC BANK 38.25 37.50 -1.96 -5.06 -9.64 -1.32 1.35 -36.44OLYMPIA CAPITAL 3.75 3.80 1.33 1.33 -12.64 -6.17 -14.61 -24.00PAN AFR INS 46.00 46.00 0.00 5.14 15.00 -22.03 -28.13 -62.90SAFARICOM 17.10 17.10 0.00 0.00 1.79 12.87 18.75 -1.16SAMEER AFRICA 3.15 3.15 0.00 0.00 -14.86 -19.23 -8.70 -45.22SASINI 17.20 18.45 7.27 -0.81 -7.75 -12.14 16.77 12.16STANLIB FAHARI I-REIT 20.25 21.75 7.41 6.10 4.82 8.75 - -WPP SCANGROUP 25.25 24.00 -4.95 -7.69 -15.79 -7.69 0.00 -46.37STANDARD GRP 29.75 29.75 0.00 3.48 2.59 2.59 0.85 -9.16STD CHART KEN 194.00 193.00 -0.52 -22.49 -14.60 0.00 -3.50 -44.54TOTAL KENYA 18.50 18.40 -0.54 -0.54 0.82 11.85 -3.16 -22.53TPS (EA) 24.75 23.50 -5.05 -6.00 -7.84 -5.05 -9.62 -32.86TRANSCENTURY 4.45 4.45 0.00 -19.09 -14.42 -40.67 -68.21 -72.19UCHUMI SUPER 4.00 4.00 0.00 -11.11 -21.57 -47.02 -56.52 -61.90UNGA GROUP 36.00 37.00 2.78 4.96 -3.27 5.71 8.03 -24.49

26 BUSINESS DAILY | Monday May 2, 2016

NAME LOCATION LAST NET.CHNG PCT.CHNG OPEN HIGH LOW CLOSE

DJ INDU AVERAGE NEWYORK 17,830.76 -210.79 -1.17% 18,023.88 18,035.73 17,796.55 18,041.55

FTSE EUROTOP 100 LONDON 2,674.05 -32.92 -1.22% 2,704.67 2,704.67 2,668.39 2,706.97

XETRA DAX PF/D FRANKFURT 10,208.73 -112.42 -1.09% 10,235.47 10,252.08 10,170.78 10,321.15

CAC 40 INDEX/D PARIS 4,493.26 -64.10 -1.41% 4,500.43 4,508.83 4,482.42 4,557.36

FTSE MIB/D MILAN 18,875.37 -101.34 -0.53% 18,800.83 18,922.24 18,773.60 18,976.71

SMI PR/D SWITZERLAND 8,005.77 -93.65 -1.16% 8,025.84 8,025.84 7,992.38 8,099.42

HANG SENG INDE/D HONGKONG 21,067.05 -320.98 -1.50% 21,215.20 21,235.39 21,023.77 21,388.03

NIKKEI 225 INDEX TOKYO 16,666.05 -624.44 -3.61% 17,438.99 17,572.27 16,652.74 17,290.49

ALL ORDINARIES AUSTRALIA 5,316.00 26.62 0.50% 5,289.40 5,320.10 5,276.30 5,289.38

SSE COMPOSITE/D SINGAPORE 2,938.45 -7.14 -0.24% 2,935.38 2,950.58 2,930.36 2,945.59

STRAITS TIMES /D SHANGHAI 3,736.86 -31.74 -0.84% 3,765.67 3,765.67 3,732.32 3,768.60

S&P SENSEX/D MUMBAI 25,465.45 -137.65 -0.54% 25,612.91 25,755.43 25,430.04 25,603.10

Currencies Global IndexesKenya Shilling

Global Indices

US Dollar

FTSE 100

Global Markets & Currencies

MARKET DATA

SOURCE: THOMPSON REUTERS

CURRENCY BUY SELL MEAN US DOLLAR 101.05 101.24 101.14 STG POUND 147.37 147.67 147.52 EURO 114.38 114.63 114.50 SA RAND 7.07 7.09 7.08 KES / USHS 32.87 33.03 32.95 KES / TSHS 21.62 21.68 21.65 KES / RWF 7.32 7.44 7.38 KES / BIF 15.20 15.72 15.46 AE DIRHAM 27.51 27.57 27.54 CAN $ 80.58 80.75 80.66 S FRANC 104.27 104.48 104.38 JPY (100) 93.05 93.24 93.14 SW KRONER 12.49 12.52 12.51 NOR KRONER 12.39 12.43 12.41 DAN KRONER 15.37 15.40 15.38 IND RUPEE 1.52 1.52 1.52 HONGKONG DOLLAR 13.03 13.05 13.04 SINGAPORE DOLLAR 74.95 75.11 75.03 SAUDI RIYAL 26.93 27.00 26.97 CHINESE YUAN 15.60 15.63 15.61 AUSTRALIAN $ 77.09 77.25 77.17 SOURCE: CBK

DAILY YTD 52 WEEK 3-YR

INDEX (REGION/COUNTRY) CLOSE CHG % CHG % CHG HIGH LOW % CHG % CHG

GLOBAL

THE GLOBAL DOW (WORLD) 2,387.81 -9.89 -0.41 2.2 2,639.52 2,047.44 -8.1 3.5

THE GLOBAL DOW EURO (WORLD) 1,987.07 -9.11 -0.46 -1.9 2,258.32 1,699.54 -9 8.5

DJ GLOBAL INDEX (WORLD) 312.66 -1.33 -0.42 1.5 341.62 272.15 -7.1 3.7

DJ GLOBAL EX U.S. (WORLD) 213.43 0.23 0.11 1.5 246.05 184.52 -12.2 -1.1

ASIA PACIFIC

DJ ASIA-PACIFIC TSM (ASIA-PACIFIC) 1,379.35 -3.7 -0.27 -0.7 1,594.00 1,190.45 -12.9 -1.3

ALL ORDINARIES (AUSTRALIA) 5,289.40 38.5 0.73 -1 5,816.20 4,816.60 -8.4 1.3

S & P/ASX 200 (AUSTRALIA) 5,225.40 37.7 0.73 -1.3 5,827.50 4,765.30 -9.8 0.8

DOW JONES CHINA 88 (CHINA) 251.33 -0.21 -0.08 -12.3 408.69 224.92 -33.4 6.9

SHANGHAI COMPOSITE (CHINA) 2,945.59 -8.08 -0.27 -16.8 5,166.35 2,655.66 -33.7 10.6

HANG SENG (HONG KONG) 21,388.03 26.43 0.12 -2.4 28,249.86 18,319.58 -24 -1.7

S & P BSE SENSEX (INDIA) 25,603.10 -461.02 -1.77 -2 28,504.93 22,951.83 -5.2 9.9

JAKARTA COMPOSITE (INDONESIA) 4,848.39 2.73 0.06 5.6 5,320.90 4,120.50 -4.7 -0.9

NIKKEI 300 (JAPAN) 269.86 -9.46 -3.39 -13.3 343.20 242.81 -16.6 4.6

NIKKEI STOCK AVG (JAPAN) 16,666.05 -624.44 -3.61 -12.4 20,868.03 14,952.61 -14.6 6.3

TOPIX INDEX (JAPAN) 1,340.55 -43.75 -3.16 -13.4 1,691.29 1,196.28 -15.8 4.9

KUALA LUMPUR COMPOSITE (MALAYSIA) 1,674.76 -17.58 -1.04 -1.049 1,827.42 1,532.14 -7.9 -0.7

S & P/NZX 50 (NEW ZEALAND) 6,789.98 39.58 0.59 7.4 6,906.10 5,546.88 17.2 14.3

KSE 100 (PAKISTAN) 34,503.64 234.36 0.68 5.1 36,228.88 30,564.50 2.3 22.2

PSEI (PHILIPPINES) 7,162.56 -17.97 -0.25 3 7,919.21 6,084.28 -7.2 0.6

STRAITS TIMES (SINGAPORE) 2,862.30 -12.42 -0.43 -0.7 3,487.39 2,532.70 -17.9 -5.1

KOSPI (SOUTH KOREA) 2,000.93 -14.47 -0.72 2 2,146.10 1,829.81 -5.9 1

COLOMBO STOCK EXCHANGE (SRI LANKA) 6,442.53 8.29 0.13 -6.6 7,498.78 5,862.35 -10.3 2.6

WEIGHTED (TAIWAN) 8,473.87 -89.18 -1.04 1.6 9,845.04 7,410.34 -13.7 1.8

SET (THAILAND) 1,399.91 -11.93 -0.84 8.7 1,526.74 1,224.83 -8.3 -4

EUROPE

STOXX EUROPE 600 (EUROPE) 348.90 0.58 0.17 -4.6 408.88 303.58 -11.8 5.6

STOXX EUROPE 50 (EUROPE) 2,932.00 4.69 0.16 -5.4 3,524.55 2,566.26 -14.7 2.6

EURO STOXX 50 (EURO ZONE) 3,125.43 -5 -0.16 -4.3 3,688.72 2,680.35 -13.6 5.2

EURO STOXX (EURO ZONE) 331.76 0.07 0.02 -3.9 380.63 284.92 -10.7 7.1

ATX (AUSTRIA) 2,343.97 14.01 0.6 -2.2 2,681.44 1,957.05 -9.4 -0.9

BEL-20 (BELGIUM) 3,476.78 -2.8 -0.08 -6 3,849.12 3,130.76 -5.4 10

PX 50 (CZECH REPUBLIC) 909.00 -4.7 -0.51 -4.9 1,042.50 845.90 -11.4 -1.8

OMX COPENHAGEN (DENMARK) 860.62 4.95 0.58 -5.1 923.55 745.49 UNCH. 20.5

OMX HELSINKI (FINLAND) 7,930.22 36.6 0.46 -7.7 8,875.70 7,257.23 -6.9 9.1

CAC 40 (FRANCE) 4,557.36 -2.04 -0.04 -1.7 5,196.73 3,896.71 -9.7 6.2

DAX (GERMANY) 10,321.15 21.32 0.21 -3.9 11,864.59 8,752.87 -9.9 9.7

BUX (HUNGARY) 26,840.75 -148.01 -0.55 12.2 27,271.78 20,610.76 18.7 14.5

FTSE MIB (ITALY) 18,976.71 226.09 1.21 -11.4 24,031.19 15,773.00 -17.7 4.6

AEX (NETHERLANDS) 450.31 1.94 0.43 1.9 503.52 382.61 -7.7 8.6

ALL-SHARES (NORWAY) 667.34 4.69 0.71 2.8 710.69 552.32 -4.1 8.4

WIG (POLAND) 47,643.70 129.79 0.27 2.5 57,379.45 42,152.70 -15.6 2.9

PSI 20 (PORTUGAL) 5,102.82 51.86 1.03 -4 6,203.15 4,460.63 -16.3 -6

RTS INDEX (RUSSIA) 964.41 37.32 4.03 27.4 1,082.21 628.41 -6.3 -11.3

IBEX 35 (SPAIN) 9,269.00 -63.6 -0.68 -2.9 11,595.40 7,746.30 -18.6 3.8

SX ALL SHARE (SWEDEN) 489.44 0.08 0.02 -3.1 546.34 435.21 -9 9.5

SWISS MARKET (SWITZERLAND) 8,099.42 2.66 0.03 -8.1 9,526.79 7,496.62 -10.8 1

BIST 100 (TURKEY) 85,477.83 103.64 0.12 19.2 88,651.88 68,567.89 1.8 0.1

FTSE 100 (U.K.) 6,322.40 2.49 0.04 1.3 7,046.80 5,537.00 -9.2 -0.5

FTSE 250 (U.K.) 17,066.45 -17.26 -0.1 -2.1 18,263.46 15,178.80 -2.3 6.9

AMERICAS

DJ AMERICAS (AMERICAS) 501.03 -3.98 -0.79 2.8 524.44 433.35 -2.6 7.4

MERVAL (ARGENTINA) 13,739.31 -2.85 -0.02 17.7 14,173.87 9,288.41 14 54.4

SAO PAULO BOVESPA (BRAZIL) 54,311.97 -165.82 -0.3 25.3 58,051.61 37,497.48 -3.4 UNCH.

S & P/TSX COMP (CANADA) 13,886.43 -1.23 -0.01 6.7 15,367.47 11,843.11 -8.8 4.4

SANTIAGO IPSA (CHILE) 3,184.44 33.58 1.07 8.2 3,358.71 2,759.77 -3.1 -4.6

IPC ALL-SHARE (MEXICO) 45,528.93 -412.59 -0.9 5.9 46,191.51 40,265.37 2.1 2.8

CARACAS GENERAL (VENEZUELA) 15,654.76 -50.89 -0.32 7.3 16,820.52 5,554.49 171.4 188.6

SOURCE : WSJ MARKETS

BACKGROUND BID ASK EURO 1.14 1.14 JAPANESE YEN 106.97 106.98 BRITISH POUND 1.46 1.46 SWISS FRANC 0.96 0.96 AUSTRALIAN DOLLAR 0.76 0.76 SWEDISH KRONA 8.06 8.06 CANADIAN DOLLAR 1.25 1.25 CHINESE YUAN 6.48 6.49 NORWEGIAN KRONE 8.10 8.10 BOSNIAN MARK 1.73 1.74 DANISH KRONE 6.54 6.54 RUSSIA ROUBLE 64.31 64.34 TURKISH LIRA 2.80 2.81 ICELAND KRONA 122.86 123.17 INDIAN RUPEE 66.48 66.49 POLISH ZLOTY 3.87 3.87 CZECH KORUNA 23.75 23.76 HUNGARIAN FORINT 273.70 274.02 UKRAINE HRYVNIA 25.20 25.21 ISRAEL SHEKEL 3.75 3.75 ALBANIAN LEK 121.05 121.80 BULGARIAN LEV 1.72 1.72 SERBIAN DINAR 59.99 60.19 CYPRUS POUND 0.40 0.40 ESTONIAN KROON 11.70 11.71 GEORGIAN LARI 2.21 2.25 THAI BAHT 34.91 34.93 GIBRALTAR POUND 1.46 1.46 CROATIAN KUNA 6.59 6.60 KAZAKHSTAN TENGE 326.52 328.12 LITHUANIA LITAS 2.85 2.85 LATVIAN LATS 0.51 0.51 MOLDOVAN LEU 19.60 19.80 MACEDONIA DENAR 54.48 55.20 MALTESE LIRA 3.41 3.42 ROMANIAN LEU 3.93 3.94 SLOVAK KORUNA 21.55 21.60 SERBIAN DINAR 107.58 107.79 ARMENIAN DRAM 476.40 480.40 UAE DIRHAM 3.67 3.67 ANGOLAN KWANZA 165.06 166.41 BURUNDI FRANC 1,539.70 1,589.70 BOTSWANA PULA 0.09 0.09 CONGO FRANC 913.00 943.00 CAPE VERDE ESCUDO 95.87 96.97 DIJIBOUTI FRANC 176.40 178.70 ALGERIAN DINAR 109.09 109.54 EGYPT POUND 8.88 8.88 ETHIOPIAN BIRR 21.35 21.75 GHANAIAN CEDI 3.83 3.84 GAMBIAN DALASI 42.10 43.60 ERITREA NAFKA 16.10 16.60 GUINEA FRANC 7,455.00 7,655.00 KENYA SHILLING 101.05 101.25 COMORO FRANC 433.25 434.25 LIBERIAN DOLLAR 90.00 95.00 LESOTHO LOTI 14.20 14.22 LIBYAN DINAR 1.36 1.37 MOROCCAN DIRHAM 9.61 9.62 MALAGASY ARIARY 3,158.00 3,198.00 MAURITANIAOUGUIYA 340.00 348.00 MALAWI KWACHA 677.79 695.37 MOZAMBIQUEMETICAL 54.50 55.59 NIGERIAN NAIRA 198.80 199.18 RWANDA FRANC 741.00 752.00 SC RUPEE 13.23 13.25 ST HELENA POUND 1.44 1.44 SIERRALEONLEON 3,898.00 3,998.00 SAO TOME DOBRA 20,870.00 22,167.00 SOMALI SHILLING 604.00 611.00 SWAZILAND LILAGENI 14.21 14.22 TUNISIAN DINAR 2.01 2.02 TANZANIA SHILLING 2,186.00 2,196.00 UGANDA SHILLING 3,315.00 3,325.00 CFA FRANC 576.06 580.06 CFA FRANC 576.21 581.21 MAURITIUS RUPEE 34.86 35.06 SOUTH AFRICA RAND 14.21 14.22

NAME LAST CLOSE NET.CHNG PCT.CHNGANGLO AMERICAN/D 763.20 753.20 10.00 1.33%ASSOC.BR.FOODS/D 3055.00 3068.00 -13.00 -0.42%ADMIRAL GROUP/D 1862.00 1866.00 -4.00 -0.21%ABDN.ASSET.MAN/D 303.40 304.30 -0.90 -0.30%AGGREKO/D 1111.00 1115.00 -4.00 -0.36%ANTOFAGASTA/D 471.70 476.00 -4.30 -0.90%ARM HOLDINGS/D 950.50 965.00 -14.50 -1.50%ASHMORE/D 308.60 310.70 -2.10 -0.68%AVIVA PLC/D 433.00 437.10 -4.10 -0.94%ASTRAZENECA/D 3962.50 3959.50 3.00 0.08%BAE SYSTEMS/D 479.03 484.00 -5.00 -1.03%BARCLAYS/D 173.25 174.40 -1.15 -0.66%BRIT AM TOBACC/D 4166.20 4186.00 -20.00 -0.48%BR LAND CO/D 725.35 724.50 1.50 0.21%BHP BILLITON/D 935.20 945.70 -10.50 -1.11%BUNZL/D 2042.00 2052.00 -10.00 -0.49%BP/D 377.30 382.30 -5.00 -1.31%BURBERRY GRP/D 1199.00 1213.00 -14.00 -1.15%BT GROUP/D 439.90 434.25 5.65 1.30%CARNIVAL/D 3412.00 3455.00 -43.00 -1.24%CENTRICA/D 238.30 238.90 -0.60 -0.25%COMPASS GROUP/D 1218.00 1232.00 -13.00 -1.06%CAPITA PLC/D 998.00 1010.00 -12.00 -1.19%CRODA INTL/D 3031.00 3045.00 -14.00 -0.46%CRH/D 2003.00 2032.00 -29.00 -1.43%DIAGEO/D 1857.00 1876.50 -19.50 -1.04%MAN GROUP/D 150.00 151.00 -1.00 -0.66%EXPERIAN/D 1258.00 1271.00 -13.00 -1.02%FRESNILLO/D 1108.37 1095.00 13.00 1.19%G4S/D 188.50 190.70 -2.20 -1.15%GKN/D 282.20 286.80 -4.60 -1.60%GLENCORE/D 156.60 156.45 0.15 0.10%GLAXOSMITHKLIN/D 1477.50 1489.00 -11.50 -0.77%HAMMERSON/D 586.00 591.00 -5.00 -0.85%HARGREAVES LS/D 1286.00 1293.00 -7.00 -0.54%HSBC HOLDINGS/D 457.85 467.35 -9.50 -2.03%ICAP PLC/D 476.10 481.20 -5.10 -1.06%IAG/D 530.00 551.00 -21.00 -3.81%INTERCONT HOTE/D 2734.00 2785.00 -51.00 -1.83%IMI PLC/D 944.00 945.00 -1.00 -0.11%INTERTEK GROUP/D 3282.00 3295.00 -13.00 -0.39%ITV/D 225.20 225.60 -0.40 -0.18%JOHNSON MATTHE/D 2885.00 2900.00 -15.00 -0.52%KAZ MINERALS/D 174.70 172.50 2.20 1.28%KINGFISHER/D 367.20 370.10 -2.90 -0.78%LAND SECS GROU/D 1140.00 1140.00 0.00 0.00%LEGAL & GENERA/D 223.70 227.20 -3.50 -1.54%LLOYDS BNK GRP/D 67.40 68.11 -0.71 -1.04%MARKS & SP./D 428.30 432.40 -4.10 -0.95%MORRISON SUPMK/D 192.60 192.80 -0.20 -0.10%NATIONAL GRID/D 969.30 975.00 -5.70 -0.58%NEXT/D 5110.00 5150.00 -40.00 -0.78%OLD MUTUAL/D 187.70 188.10 -0.40 -0.21%PETROFAC/D 859.00 861.50 -2.50 -0.29%POLYMETAL INT/D 713.00 705.50 7.50 1.06%PRUDENTIAL/D 1361.00 1375.00 -14.00 -1.02%PEARSON/D 806.50 814.50 -8.00 -0.98%RECKIT BNCSR G/D 6702.00 6755.00 -53.00 -0.78%ROYAL BANK SCO/D 239.10 244.80 -5.70 -2.33%RDS ‘A/D 1800.50 1812.50 -12.00 -0.66%RELX/D 1201.61 1215.00 -14.00 -1.15%ROYAL DTCH SHL/D 1805.60 1820.50 -14.50 -0.80%REXAM/D 629.00 632.00 -3.00 -0.47%RIO TINTO/D 2328.00 2329.50 -1.50 -0.06%ROLLS ROYCE PL/D 683.50 694.00 -10.50 -1.51%RANDGOLD RES./D 6580.00 6525.00 55.00 0.84%RSA INSRANCE G/D 458.20 459.60 -1.40 -0.30%SABMILLER/D 4207.50 4205.00 2.50 0.06%SAINSBURY(J)/D 290.80 291.80 -1.00 -0.34%SCHRODERS/D 2509.00 2568.00 -59.00 -2.30%SCHRODERS NV/D 1930.00 1976.00 -41.00 -2.07%SAGE GROUP/D 592.82 592.50 0.00 0.00%SHIRE/D 4125.00 4187.00 -62.00 -1.48%STANDARD LIFE/D 328.00 331.80 -3.40 -1.02%SMITHS GROUP/D 1135.00 1137.00 -2.00 -0.18%SMITH&NEPHEW/D 1157.00 1169.00 -12.00 -1.03%SERCO GROUP/D 96.75 97.65 -0.90 -0.92%SSE PLC/D 1513.00 1523.00 -10.00 -0.66%STANDRD CHART /D 563.30 570.60 -7.30 -1.28%SEVERN TRENT/D 2221.00 2230.00 -9.00 -0.40%TATE & LYLE/D 595.50 596.50 -1.00 -0.17%TULLOW OIL/D 281.00 281.40 -0.40 -0.14%TESCO/D 173.80 173.30 0.50 0.29%UNILEVER/D 3070.50 3107.00 -36.50 -1.17%UNITED UTIL GR/D 936.50 937.50 -1.00 -0.11%VEDANTA RES/D 418.80 427.40 -8.60 -2.01%VODAFONE GROUP/D 221.15 223.90 -2.75 -1.23%WEIR GROUP/D 1232.00 1213.00 19.00 1.57%WOLSELEY/D 3877.00 3915.00 -38.00 -0.97%WPP PLC/D 1606.00 1628.00 -22.00 -1.35%WHITBREAD/D 3929.00 4012.00 -83.00 -2.07%

27Monday May 2, 2016 | BUSINESS DAILY

LI E SUCCESSObstacles a≥e c≥eations of you≥ mind, ove≥come them Page 29

BUSINESS LAWHow to tu≥n you≥ sta≥tup into magnet fo≥ ventu≥e capitalPage 30

F I N A N C E

BY WAMBUI KIRIMI

My first job after graduation many years back was as a merchandiser in Uchumi supermarkets. I still re-

member the day I reported, bright-eyed and bushy tailed, to work.

My first real job in the world of marketing! I was so proud of myself, having ducked the drudgery of the accounting world (I’d interned briefly at one of the big audit firms during my second year. As far as I was concerned watch-ing paint dry was infinitely more interesting. I changed my major to marketing after that disas-trous experiment and shimmied happily on).

The direct marketing ad hadn’t been too descriptive but it sure sounded like a big girl job. ‘‘Engaging customers, with a view to up selling’’, the ad read in part. Wow! Very impor-tant work!

What they omitted was the fine print, as I discovered soon enough. Day one was orienta-tion, and the job was quite sim-ple. To sell rice to customers in three Uchumi hypers — Ngong Road, Langata and Sarit Centre — on rotation.

I had to make sure that no customer picked any other brand for the weeks that we were on the shop floor. And most importantly, behave like my life depended on it. The brand promise was that our rice was premium stuff. So good that if we could only get shoppers to try it, they’d be hooked for life. Moreover, there were onerous daily targets to be met, so we really had to hustle.

Training completed, I set to work. I would meet the targets, I resolved, in that overly self-assured way that upstarts do. Enter lesson one. There’s nothing quite as humbling as the hustle. I encountered every type of customer, and Phillip Kotler, as the marketing Bible is fondly referred to, hadn’t prepared me for any of them.

From the middle aged men with their inap-propriate comments, to their overbearing wives who marched past my spiel as though I was a pillar of salt. To this day I have bought many an item in supermarkets, because I know that just one kind heart can restore the faith of a young girl working on the shop floor of life. But that

was not all. At the end of the day as we did our tally, I discovered another brand of customer — the ever so courteous one who would gra-ciously accept my rice – but leave it in the trol-ley at check out. Grrrrrrr....

My blood froze the day I ran into my former campus mates. Or more precisely, the day my former campus mates ran into me. We’d heard rumours that PricewaterhouseCoopers gave a decent dressing allowance to its new recruits so that within a few days of reporting they were dapper enough to dine at the table of kings.

And their confidence confirmed it — they’d hit the job jackpot. I shrank a few inches more when they graciously accepted my rice, and (rather pitifully) wished me luck. Everyone must run their own race, I realised.

Accepting this cruel turn of fate, I soldiered on into my next lesson — the big picture. Those

few months pummeled me. I dis-covered that life, is indeed, lived in a pixel, but wisdom is choosing to see the picture. No, revolving tar-gets, aching ankles and waning confidence were not my expecta-tion when I changed majors just two years earlier.

But this was the work that was available to me. And I needed to put something down on my CV, because I realised that this could very well be the stepping stone to greatness. I was right. Within a few months the

boss’ assistant quit and based on my perform-ance I was chosen to replace her!

In this new role, I came face to face with my fourth lesson — who you know matters a great deal. Call them mentors, networks, friends; the bottom line is this — that the corporate/business world is not a level playing field. Working with my boss, I quickly came to understand the value of carefully calibrated networks.

Her consultancy was a busy one, and it was because, not only had she distinguished herself in her delivery, but more importantly, I could see, she was a part of the fraternity.

She knew of opportunities long before they became public knowledge, and we landed well-paying job after job, as a result. I learnt this one well. Every job I have landed since my rice days, as I affectionately call them, has been one I came to know of through networks. You need to know the right people, because as you rise

Ca≥ee≥ lessons no one will teach you at the unive≥sity

GEMS Who you know matters a great deal; the bottom line is that the corporate world is not a level playing field

higher and higher up the ladder, it’s who you know, not what you know, that counts. Grossly unfair, yes, but nevertheless true.

Choose the impossible bosses — the tyrants have plenty to teach too. A lot of corporate chat-ter characterises demanding superiors as ‘‘bad’’. But having worked under several over 15 years, I know firsthand the value they bring. The of-fice isn’t a place you should seek comfort, and certainly not within your first 10 years. (If you are relaxed, it’s time to get out!) A good boss will stretch you to the limit, a limit you don’t

think you could possibly endure. But ultimately, iron sharpens iron. And while I spent a great deal of time whining, I noticed something about this breed of bosses — they are often very fair and surprisingly generous once you rise to their expected level of performance. And so I have learnt to put my pride aside quickly and often, since.

Watch and learn. Hitherto, I didn’t care for details. Not only did I not know the difference between pishori and basmati, quite frankly I didn’t care. Faced with targets, and customers with numerous objections, the details quickly became paramount. I learnt to observe every-thing that happened on my aisle. I soon began to profile customers based on what they bought and how they bought. I peeked into their trol-leys and learnt to make connections.

Customers to avoidAfter a month or two, I could pick my jackpot customer out of a group of shoppers, and af-ter a while, I was rarely wrong. I knew which customers to avoid (they’d chat me up and leave without a purchase), and which ones were likely to buy a lot. I also discovered the world of loyalty — repeat customers who’d pick the product without any hesitation or compulsion. The longer I stayed on the floor, the easier things got. Bliss.

Don’t be afraid to ask for what you need. Pacing that floor, I quickly realised that my greatest ally was… wait for it… the shelf stocker. That’s the guy who ensures a product is readily available and decides where everything goes on the shelf.

My fortunes depended greatly on him be-cause a stock out, especially on weekends and at the end of the month, could be disastrous. Placement was everything too. A lot of selling is subliminal, and generally, increased shelf space leads to greater sales.

My shelf stocker was also a wealth of in-formation. He knew everything about the dif-ferent products and how to sell. Together we schemed our way to optimal placement, larger displays and more cash in the bank. Who’s the shelf stocker in your life? You know, the person you need to impress (or alternatively, not an-noy) to get ahead?

And the greatest lesson of all? A healthy dose of perspective. Life is a mixed bag. Sure, it was rice then. Over the years, the challenges have changed, but this lesson has remained. The good comes with the bad. Expect some hits and some misses. There will be bad and good days, bosses, presentations, reviews etc. And as I see young professionals starting out within my current organisation, I realise I have had it pretty good over the years. But that’s a story for another day.Mrs Kirimi is head of marketing and com-munication at ABC Bank. wambui.kaguongo@gmail.com

The good comes with the bad. Ex-pect some hits and some misses.

Choose the impos-sible bosses — the tyrants have plenty to teach too. FILE

28 BUSINESS DAILY | Monday May 2, 2016

Behaviou≥ that annoys employe≥s

Life: Personal Development

First of all know this: you’re valuable. We love you. You’re important to the business.

It’s just that, well, sometimes as an employee you can do things that get under our skin.

Want some examples? OK, here are five. Yes, some may seem petty. But they’re for real.

- ENTREPRENEUR

1. Too much chit-chatWhen we see you and a fellow employee chit-chatting in the break room for more than a few minutes our an-

tenna goes up and our cogni-tive calculator clicks into gear. We start calculating how much your little catch up is costing by the hour. And just a 10 minute conversation among a few of you can cost a lot in lost time. You’re rolling your eyes, right? That doesn’t sound like much. But hey… it’s a dinner out with the spouse, right? Trust me, eve-ry business owner thinks this at one time or another.

2. You complain with-out suggestingWe all have com-plaints. And business owners probably deal with more than the av-

erage Joe. But we are always open to improving our businesses. We really do want to hear your feed-back. We get it. It’s human to com-plain. But we don’t like it. We’re happy to hear any issues as long as you’ve got a recommendation to go along with it. So next time you want to complain about some-thing think first: how would I make this better? We might not agree but we’ll appreciate constructive suggestions always.

3. You’re not making us moneyEveryone in the com-pany is always sell-ing, regardless of your role. Most of us

know that we’re not maximising the opportunities with our exist-ing customer base even as we’re spending too much in marketing to bring in new customers. We need your help. You’re on the front lines. Are you positively representing our company and looking for op-portunities? If you’re helping the boss to increase revenues then you’re an essential part of the company.

4. You don’t do what you say you will doIf you promise some-thing, deliver it. If you’re supposed to be at work by 8:30, be

there. If you’re responsible for the new phone system, the inventory count, the maintenance on the company’s truck or the training of that new em-ployee just do it. Business owners are under-staffed and under-resourced. We need help. We need people that will say “yes” and execute. We need doers more than thinkers. We need people that can be relied upon and trusted and when we find those peo-ple we never let them go.

5. Finally, you’re not gratefulI know this sounds trite. But you work for a good company. Sure we have our faults. But no com-

pany is completely rosy and trust me — every company has its issues. We’re doing our best to keep our business stable and growing. You are relying on us for your livelihood and we don’t take that responsibility lightly. But you should be grateful too. Showing that appreciation once in a while, a thank you or a compli-ment, goes a long way for the busi-ness owner who does nothing but deal with headaches all day long.

Employers don’t like gossiping at the office, it wastes man-hours. FOTOSEARCH

Your business plan is a blueprint for how your company is going

to turn out. Write a solid, de-tailed business plan and you’ll have a clear idea of how your first few years of operations will go — you’ll even be able to use it as a tool to round up funding and attract new part-ners and hires.

The flip side, of course, is that a bad or weak business plan could wind up compro-mising an otherwise feasible organisation.

The problem with business plans is that entrepreneurs are usually so excited to get started, they rush through the planning process and never seek third-party feedback, leaving their plans riddled with numerous flaws. These flaws are painfully common in early-stage business plans, so hunt them down and weed them out immediately:

You’ve neglected cash flowMost early-stage business plans focus almost exclu-sively on profitability -- the ability to generate more rev-enue than you’re spending in associated costs. But, even more important to consider is the idea of cash flow, which dictates how much cash your business has on hand at any given time. Technically, a business can be “profitable” on paper, but still have cash flow issues.

Negative cash flow can result in bankruptcy and col-lapse, so make sure a cash-flow management strategy is part of your business plan.

Putting too much value on the central ideaYes, your idea is important, but it isn’t the most important thing in your business plan. If you’ve put your idea on a ped-estal and skirted around some of the finer details thinking, “The idea’s good enough to work on its own,” you’ve cre-ated a flawed business plan. Even the best ideas need some practical groundwork to suc-ceed. Your focus here should be less on the “what” and more on the “hows,” “wheres” and “whens.”

Being specific enoughWhen setting goals, describ-ing scenarios, or making long-term models, you need to get specific. Most new business owners skip the details in fa-vour of vague descriptors, like “significant growth over the first few years,” instead of “40 percent increase in sales dur-ing year one, and 30 percent in year two.”

There are two reasons for this: laziness (or a lack of de-sire to offer more specific in-formation), or a fear that your numbers might be wrong. It’s okay to be wrong, but you have to be specific if you want meas-urable, actionable targets.

Your models aren’t realisticThat being said, specific goals often aren’t enough to make your business plan actionable. You also need to set realistic figures and expectations.

Most business owners think optimistically, project-ing a course of exponential growth — they’ll plot out a period of little-to-no growth, followed by a “tipping point” at which point sales explode. The fact is, most businesses don’t grow this way, and set-ting unrealistic expectations will only hurt you in the long run.

You haven’t prioritisedIf you have a list of 30 priori-ties, you might as well have a list of zero priorities. The word “priority” implies that an item is taking precedence over an-other, which demands that you filter some of your tasks out entirely.

Not enough researchHow much of your business plan was written off the top of your head, and how much was based in actual quantitative data? If you’re like most new and aspiring entrepreneurs, your business plan will lean toward the former.

If you have lots of experi-ence in your field, you may be able to come to significant con-clusions on your own, but it’s never a bad idea to bring more research to the table.

- ENTREPRENEUR

Flaws that must be weeded out from your business plan

29Monday May 2, 2016 | BUSINESS DAILY

thing goes wrong? What if I fail? What if they do not buy into my idea? What if they do not think I am worth what I’m charging? Fear then sets in and seals our fate at the gate that leads to the starting point of the goals that hold the key to our ideal futures.

Same mental capacity, differ-ent applications and consequent results. Look, there are not real obstacles. Our imagination is very active. When it creates images in our minds, those images are just as active. Our imagination either keeps us actively reaching into the deepest unlimited reservoirs of our abilities or forever scratching on the outer surface of our best possible results in life.

We must want the ideal in every situation so much that we will our

minds to only focus on the best possible outcomes in every undertaking. Yes, we could fail but there’s also the chance that we could succeed. What prof-itable purpose can focusing on the possibility of

failure serve other than despondency? I suggest that you desist from focusing on a pre-determined destination and direct your attention to navigating the ups and downs. This is when you can say that you experience life fully, allowing it to grow you in the process. Living fearfully means attempting to constantly protect yourself from life’s downs by not every sticking your neck out to try much or anything. This may seem like a good strategy to protect yourself.

Good that could profit youMaybe so. It also is a good strategy to prevent oth-ers from getting into your life. Sure, some may get in and do some damage but there are those who get in with all the good they have.

Now you will not know or benefit from them unless you let yourself experience them. The ma-jority of persons that you will come into contact with are with you for what they can gain from you. Granted, we are all very selfish. It is the way we are created but there are those select few who are aware of Anne Wilhette’s concept of “Givers gain”. These are the rare people who genuinely

care about others’ welfare. They make it their mis-sion in life to ensure that every person they come into contact with has benefited from them in one way or another. No, they will not usually fill your bank ac-count to the brim but what you gain from being in contact with them however briefly may very well do that twice over. They are not overtly philanthropic so recognising them requires a very balanced per-spective on your part. You must be in a position to decipher their intention for you even when it is not obviously clear.

The good people are not that many. You will not bump onto them too frequently but when you do, it never is a coincidence.

It always is for your benefit but that only comes to be if and only if you have developed the presence of mind to recognise them from the onset and let them in. Stop imagining the worst. No matter how many times you’ve failed, been embarrassed and humili-ated, the best is meant for you too. It just will not come unless you make room for it. Will you? Ruligirwa-Kamara is an expert on Attitude & Hu-man Potential. Sera@iuponline.com. @SRuligirwa

Life: Personal Development

Too many of us unknowingly place obstacles between ourselves and the circumstances that we would like.

Why don’t we have the jobs that we want? Why can’t we get our team working with us more willingly?

Why wont our clients not just appreciate our unique propositions at the first presenta-tions and pay us what we are worth?

While it is excruciatingly frustrating to encounter stumbling blocks whenever we make spirited attempts at making real head-way, there are no real obstacles.

At the risk of having you write this off as some motivational mambo-jambo, the hitches we experience are more imagined than real. Yes, I realise just how vivid obsta-cles can be. Obstacles to anything are only figments of our imagination. Imagination is one of the most powerful mental faculties that we possess. It can be as tame or as mild as we want it.

With this same faculty, we have the ability to create near tangible visions of the ideals we seek and progressively start working towards them until we achieve them.

It really is about how we choose to use our imagina-tion. Some of us will use it to conjure up the more embarrassing scenarios of failure at even the simplest of endeavours that then renders us totally unable to even consider taking the first step. What if some-

LIVING We have ability to create near tangible visions of the ideals we seek, work towards and achieve them

Life: Personal Development

Obstacles a≥e c≥eations of you≥ mind, ove≥come them

No matter how many times you’ve failed, been embarrassed and humiliated, the best is meant for you too. FOTOSEARCH

SUCCESS

SERAPHINE RULIGIRWA-KAMARA

Imagination can keep us actively reaching into the deepest unlimited reservoirs of our abilities

As the saying goes, football is a game of inches. Some of the biggest and most painful losses

come directly from either being a sec-ond too late, a second too soon or an inch away from a favourable outcome of the game.

Just as football is a game of inches, so is winning in life and business. If you want to start living life on a new level, then you will need to make some crucial mindset shifts. How we think largely determines our destiny. The quality of our relation-ships, business success and happiness among so many other things boils down to our mindset. Here are mindset shifts that will transform your life forever.

Grow through the tough times in-stead of just going through themOne of the most important mindset shifts that could open your life and business up to new possibilities is to grow through the tough and discour-aging times of life instead of just going through them.

Fuel your faith, not your fearWe all have faith and fear to some de-gree, however, where it becomes a ma-jor stumbling block for most is when you fuel your fears more than they fuel your faith. Fear is normal, and even the best of the best experience it from time to time, but what they do differently is

they re-channel it. When they feel fear, they face it head on by acknowledging it, and then shift their mindset to instead fuel their faith.

What you give energy to will likely manifest. Fuelling your faith, refers to seeing yourself beyond your current cir-cumstances and flirting with all of the possibilities for what could go right in-stead of paying attention to what could go wrong.

Love the process more than outcomeThere is no incredibly successful en-trepreneur, athlete, business execu-tive or any other high achiever who has reached a level of greatness in their life

that didn’t love the process. So many people would rather focus on the desired outcome and destination instead of sa-vouring the process that will get them to that destination.

The obstacles, the challenges, the sleepless nights. That pathway to suc-cess is what builds champions. You don’t just put together a football team and go out on Sunday’s and win a Super Bowl.

You don’t just hire employees and ex-pect to have a thriving organisation right from the get go. You don’t just come up with an idea one day and fall into fame and fortune. In all three of these sce-narios, a process is required. The best of the best absolutely love the process and

journey no matter how difficult it may be at times, because they know that’s where the real value is.

Money follows missionThe growth, strength, perseverance, skill set and courage that is instilled in the greatest men and women in the world all came from the savouring the process, not from the destination or end result.

If you can learn to love the proc-ess, you will give yourself a competi-tive advantage in life and in business, that does a whole lot more than pay you monetarily.

- ENTREPRENEUR

Here are mindset shifts that can transform your life forever

30 BUSINESS DAILY | Monday May 2, 2016

Venture capital is investment made in start-ups by third parties. Startups sel-dom have enough resources to grow

hence the need for new funds.Venture capital is an alternate source of

financing startups to conventional methods such as debt.

Often, startups have difficult raising col-lateral required for debt financing. Venture capital has become an option for startups which are innovative, with high growth po-tential.

There are a number of motivating factors for investors to fund startups. The main moti-vation is to make a return on investment.

Some investors are motivated by social welfare, for example funding environmental and sustainable energy startups.

Others invest in startups to enable them diversify into new businesses and access new markets.

For example, an American investor can choose to invest in a Kenyan startup to enable him access the local market without neces-sarily having to register a new entity.

The concept of venture capital is not new. It has existed from the World War 2 era when wealthy families invested in startups in what was commonly known as develop-ment capital.

Venture capital has become a multi-billion industry, contributing to economic growth globally.

Kenya has been attracting a sizeable amount of venture capital because of its standing as an innovation hub.

How then do you position yourself to at-tract venture capital? The first thing is to have an innovative concept which can be commer-cialised. Venture capitalists do not invest in just any business, they go for startups that are

driven by innovation and with high potential for growth. It is not enough to just have an innovative concept, it is important that the concept can be of commercial value and earn good returns for investors.

You need to package your concept well and undertake independent market research on its viability, among other things.

Due diligenceYour business entity should be registered in order to attract venture capitalists. Most of them prefer to invest in companies because they can become part owners.

Therefore, incorporate a company and ensure you keep records because investors will want to do a due diligence before fund-ing it.

You must practice good governance, which includes doing all the necessary filings with the registrar of companies.

You need to understand the mindset of a venture capitalist. He will want to know what he will gain by investing in your startup. An

investor is interested in the return on his in-vestment. He wants the highest return, at the shortest time possible and with the least amount of risk.

Therefore you need to consider what re-turn the investor will make by investing on your company. You need to minimise the time in which the return will be realised and also have a risk mitigating policy.

Income that can be earned in the meantime includes dividend. You can attract investors by issuing them with preference shares.

The shares carry a lower risk to the inves-tor than ordinary shares. Preference shares also allow the investor to earn dividend and income in the interim.

Some investors are motivated by control and management, hence they are motivated by managerial positions.

The key to remaining attractive to inves-tors is to offer them motivational perks.Mputhia is the founder of C.Mputhia Advo-cates. cmputhia@cmputhiadvocates.com. www.cmputhiadvocates.com

Life: Law

How to tu≥n you≥ sta≥tup into a magnet fo≥ ventu≥e capital

BUSINESS LAW

CATHY MPUTHIA

Venture capitalists do not invest in just any business, they go for startups that are driven by innovation and with high potential for growth. FILE

TIMES CROSSWORD 25114

How to playFill the grid so that every row, every column and every 3x3 box contains 1-9.You solve the puzzle with reasoning and logic and not mathematical ability

SUDOKU PUZZLE 196

TIMES 25,113

SUDOKU 195

Solution:3039

Solution: 3102

Solution:0365

INITIATE

Across1 Awkward youth restricted movement

of English sloop (11)

7 Little creature almost escaped to the

West (3)

9 One of Dan’s people requiring brain

stem surgery? (9)

10 Church property making a comeback

among the Belgians (5)

11 Useful acquaintance securing current

passage (7)

12 Watery drink runs out in firstclass

clubs (7)

13 Eminent educational establishment

backed by duke (5)

15 Deficit arising from brief season on

Broadway? (9)

17 Cut back the old, accepting the new

packaging material (9)

19 After a month, volunteers for ruling

faction (5)

20 Sport providing treatment for shock?

(7)

22 See a big creature with antlers

— and bolt! (7)

24 Leader of squad abandons dismal

game (5)

25 Damaged in mail, not like Samson

Agonistes (9)

27 Novel place to keep tools, for the

most part (3)

28 Prevailing conditions in Hamlet’s

Denmark, for example? (5,2,4)

Down1 Trilby’s occupation — one of several?

(3)

2 Kid initially installed in farm building

(5)

3 Side that’s sheltered from conflict in

80% of city (7)

4 Missed tea, unfortunately, having

coffee in this (9)

5 Shrub Holland’s first queen raised (5)

6 Artist briefly upset over damaged

dairy product (7)

7 Discomfort of sightseers right inside

Orient Express? (3,6)

8 Possibly Nancy’s unauthorised

absence? (6,5)

11 Blatant criminal’s films about

posh old university (11)

14 Fairly good, distributing beer to all (9)

16 Think too highly of union leader

coming in across glen (9)

18 Reportedly test fungi, having the

muscle (7)

19 Start of favourite’s first deciding

round (4-3)

21 Old stringed instrument, one

exported from African country (5)

23 Section of army that’s left college

… (5)

26 … and even area in city (3)

The Solution to this Puzzle is unavailable. We apologize for the inconvenience

1 2 3 4 5 876

9 10

11 12

13 14 15 16

17 18 19

20 21 22 23

24 25 26

27 28

B U B B L E A N D S Q U E A KU E I X O A C AF E S T E R I N G T O O T SF O I S B A N HO U T I N G H E I R L O O MO W R M IN E W M A N C R O U P I E R

H I P Y R SS W I F T I A N S T A T U SH T R I OA M E R I C A N S C O T E RC H D F S A E CK R A A L F R E E R A N G EU L E I T I N RP I L E D O N T H E A G O N Y

31Monday May 2, 2016 | BUSINESS DAILY

Barcelona beat 10-man Real Betis 2-0 to regain top spot in La Liga at the end of a day that saw all three title rivals spend

time as leaders.Real Madrid went top with a 1-0 win at Real

Sociedad before being replaced by Atletico Ma-drid after they beat RayoVallecano 1-0.

But Barca held their nerve to overcome Betis, who had HeikoWestermann sent off for two bookings, with goals from Ivan Rak-itic and Luis Suarez.

Barcelona lead the table from Atletico Madrid thanks to their superior head-to-head record

Defending champions Barcelona had scored 14 goals in winning their previous two league games.

But they found it difficult to break down a Betis side who played with 10 men from the 35th minute after defender Westermann had tripped Rakitic to earn his second caution in the space of eight minutes.

The opening goal came five minutes into the second half when a Lionel Messi ball into the penalty area caused confusion between defender German Pezzella and goalkeeper Antonio Adan, and midfielder Rakitic was left with a simple tap-in for his 10th goal of the season.

The second goal did not come until nine minutes from time when Messi played through a perfect pass for Suarez to slot home his 54th goal of the season.

Barcelona keeper Claudio Bravo came off

late on with a calf strain and will have further tests on the injury on Sunday.

Barcelona coach Luis Enrique: “It’s a very competitive league and I think the three can-didates are strong. No-one will slip up, we de-pend on ourselves.

“There is less to go (now). I am sure against Espanyol, Camp Nou will be packed to the rafters.”

Gareth Bale headed in a late goal as Real Madrid won 1-0 at Real Sociedad to briefly go top of La Liga.

Real were again without the injured Cris-tiano Ronaldo, who also missed the goalless first leg of their Champions League semi-final at Manchester City.

Striker KarimBenzema was also absent but Bale filled the void with his 19th goal of the season.

Real play the return leg against City on Wednesday night.

Bale had missed a number of chances as ZinedineZidane’s side chased a 10th succes-sive league win to keep the pressure on title rivalsAtletico Madrid, who later beat RayoVal-lecano 1-0, and Barcelona, who went back to the top after beating Real Betis 2-0.

But the Wales international, 26, who scored twice as Real beat RayoVallecano a week ear-lier, enhanced Real’s chances of a first title success since 2012 when he powerfully headed home a cross from Lucas Vazquez. -BBC

La Liga top spot changes hands th≥ee times as Ba≥ca ≥egain league lead

Barcelona mid-fielder Ivan Rakitic (left) celebrates a goal with team-mates during the match agaisnt Real Betis at the Benito Villamarin stadium in Sevilla on Sat-urday. AFP

SPORTS BRIEFINGDeGale beats Medina to regain middleweight titleBritain’s James DeGale retained his IBF su-per-middleweight title in Washington DC on Saturday to set up a potential unifica-tion bout with Badou Jack.DeGale beat Mexico’s Rogelio Medina on points in a unanimous decision, with a 115-113 and two 117-111 cards.Sweden’s Jack later successfully defended his WBC title on the same card against Ro-manian-Canadian Lucian Bute.Following his second defence of the belt,

former Olympic champion DeGale said: “I want Badou Jack.”Londoner DeGale, who extended his win-ning record to 23-1, was in control for the majority of the 12 rounds but Medina, 27, did enough to stay in the bout.However, 30-year-old DeGale said he was disappointed to fail in his pre-fight prom-ise of a knockout.“He’s a very tough fighter, he has obviously got a lot stronger and better over the last year and a half,” DeGale told Sky Sports.“I should be taking out people like Medina,

that’s no disrespect to him. But I’m still learning. “But the main thing is I am still champ. I’ve got to work on things still.”DeGale has previously said he will also give unbeaten Liverpool’s Callum Smith, who stopped HadillahMohoumadi inside one round earlier this month, a shot at the title.Galileo Gold in surprise winFrankie Dettori rode 14-1 shot Galileo Gold to a surprise victory in the first classic of the 2016 Flat season, the 2000 Guineas at

Newmarket. Favourite Air Force Blue, win-ner of the Dewhurst Stakes last year and four of his five races, never challenged and was a distant 12th of the 13 runners.Dettori crossed to the rail side to win by one and half lengths for his third victory in the prestigious mile race.Massat (9-1) was second with Ribchester (33-1) two lengths back in third.Air Force Blue was widely expected to give trainer Aidan O’Brien a record eighth 2000 Guineas success. But Ryan Moore could find no response from the bay colt and it

was Dettori who surged clear, 20 years on from his first success in the race on Mark of Esteem.He also won again in 1999 on Island Sands.The veteran jockey, 45, said of his latest triumph: “We had a bad draw but he’s a great horse.“His main forte is that he stays, he gal-loped out really strong.”Trainer Hugo Palmer said: “Frankie was so alert, he said nothing had been coming from behind and that if nothing took us on, he would do it himself and he did.

Around 100 Everton fans stayed behind for 90 minutes to protest against manager Roberto Martinez following Saturday’s 2-1 win over Bournemouth.

Supporters displayed banners that read “Martinez out” and called for chairman Bill Kenwright to step down.

Another banner that read “Time to go Roberto” was flown over Goodison Park during the match.

“Those aspects [the protests] are not for me. My concentra-tion is on preparing for the game,” said Martinez.

An anti-Martinez banner was flown over the ground during the match - NSNO stands for ‘Nil satis nisi optimum’, Everton’s motto, which is Latin for ‘Nothing but the best is good enough’

The protesters who had stayed in the ground eventually dispersed around 18:15 BST. The win was only Everton’s fifth at home in the Premier League this season, and their first win in eight games in all competitions.

“Football is a game full of passion and emotions and I un-derstand what comes when you have not won enough games,” Martinez added.

“I can understand we have been through a very painful time but we had high hopes; we wanted to get into the FA Cup final and we have had eight league defeats at home.

Meanwhile, Arsenal boss Arsene Wenger had to endure calls for his departure as his side beat a Norwich team whose Premier League future looks increasingly bleak.

Fans protested inside and outside Emirates Stadium, voic-ing frustration at their team’s failure to mount a title challenge in recent years.

There was little for Arsenal to cheer until substitute Danny Welbeck put them ahead with a crisp half-volley.

Norwich are two points from safety with three games left. They had chances - twice PetrCech stopped Nathan Redmond from scoring. But for all theirendeavour, Norwich left north Lon-don with nothing and with Newcastle beating Crystal Palace and Sunderland securing a draw against Stoke earlier in the day, their hopes of survival appear slim. -BBC

Eve≥ton fans stage p≥otest against coach

Everton fans during an FA Cup semi-final football match between Everton and Manchester United at Wembley Stadium in London . AFP

FOOTBALL Defending champions lead the table from Atletico due to their superior head-to-head record

32 BUSINESS DAILY | Monday May 2, 2016

www.businessdailyafrica.com

Last week the Overseas Develop-ment Institute (ODI) published an interesting paper on export-

based manufacturing potential in Sub-Saharan Africa (SSA). The report states that contrary to the common view, pro-duction, employment, trade and foreign direct investment in the manufacturing sectors has actually increased over the past decade.

Between 2005 and 2014, manufacturing production more than doubled from $73 billion to $157 billion, growing 3.5 per cent an-nually in real terms. Some are higher with Uganda’s manufacturing growing by five per cent over 2010-2014, Zambia’s by six per cent over 2008-2012 and Tanzania’s by more than seven per cent in the last decade.

Further, SSA countries are increasing-ly exporting to each other (20 per cent of total trade in 2005, 34 per cent in 2014), and there is a great deal of foreign direct investment (FDI) into manufacturing among and between African countries. The report states that there are excep-tional opportunities in garments and

textiles, agro-processing/horticulture, automobiles and consumer goods.

However, the share of manufactur-ing in total employment fell from 10 per cent in 1991 to 8.5 per cent in 2013. This is important to note because although manufacturing is growing, the employ-ment creation ability of the sector seems more muted now. Perhaps factors such

as the growing role of tech-nology in manufacturing is important over the past decade.

The report is very sober in noting the reality the whole of Africa’s share in global manufacturing ex-ports remains less than one per cent, having fallen mar-ginally since 2010. Yet the good news is that between

2005 and 2014 exports grew at an aver-age annual rate of 10 per cent or higher in the product groups analysed.

In terms of insights on Kenya, the share of manufacturing exports is higher than Ethiopian and Rwandan. Further, the intra-African trade share of Kenya was high at 67.5 per cent in 2013. But, as the report notes, this figure ought to be considered in the reality that the coastal

countries with large ports, such as Ken-ya, facilitate regional import and export pushing trade numbers. Top manufac-tures from Kenya include apparel, cloth-ing and accessories, perfume, cosmetics and cleansers, iron and steel and inor-ganic chemicals.

Promising sectorsBut compared to the peers, Kenya has a lower share of domestic value-added (DVA) content of gross exports as a share of total exported value added with DVA standing at a lower than average 62 per cent. The most promising sectors in manufacturing in Kenya detailed in the report, in terms of revealed com-parative advantage, include automatic typewriters and word-processing ma-chines, self-adhesive paper and paper-board, hair-nets, safety pins of iron or steel, carbonates, flat-rolled products of

iron or non-alloy steel, and leather.As ODI’s Dirk Willem te Velde states,

industrial development is crucial for hu-man development and leads to wealth creation, economy-wide productivity change, greater incomes, significant job creation and resilience throughout the economy. As a development economist, there are two points of interest for me in terms of informally assessing the devel-opment potential of manufacturing.

First, is the extent to which manu-facturing can absorb low-skilled labour given that Kenya’s population’s average years of schooling is 6.5 years. The second is the employment creation potential of manufacturing. For too long Africa has supported the jobless growth phenom-ena where the economy is growing but formal job creation is lacklustre.

The report provides some insight on these issues by looking at Tanzania where the highest low-skilled employ-ment potential is in agricultural prod-ucts, good news given the importance of agriculture to countries such as Kenya and Tanzania.

In terms of employment potential, for Tanzania, agriculture comes out on top again. Agricultural products such as high-value vegetables and fruits, processed grains, processed meat, wood products and leather have high employment potential. The good news: it is possible for agriculture to absorb low-skilled labour and have high em-ployment potential.

This should provide impetus for Kenya to replicate the agro-processing to leap-frog development. But remem-ber high wages are a constraint for the sector. Labour costs in SSA are gener-ally higher (relative to GDP per capita) than in low-and middle-income Asia and Latin America.Ms Were is a development economist; email: anzetsew@gmail.com

REPORT Study shows that in the past 10 years the industry has doubled its exports to $157 billion

The OUTLOOKECONOMIC ANALYSIS & COMMENTARY with Anzetse Were

Workers at a Kenyan textile processing factory. The clothing sub-sector is among the top manufacturers identified. FILE

Manufactu≥ing in Af≥ica is g≥owing faste≥ than fo≥ecast

Top manufactu≥es f≥om Kenya include appa≥el, clothing and accesso≥ies and pe≥fume..

The yen surged to an 18-month peak on Friday as investors wagered the Bank of Japan (BoJ) might be done adding fresh stimulus to the economy, hurting prospects for Japanese exporters with a move that rippled through share mar-kets across the Asian region.

Perhaps taking advantage of Ja-pan’s absence for a holiday, specula-tors smashed through the yen’s previ-ous top at 107.63 per dollar earlier this month and drove the currency as high as 107.075. It was last trading at 107.28.

It had been at 111.67 before Thurs-day’s surprise decision by the BoJ not to ease policy further.

The euro likewise dropped to 122.21 yen, not quite managing to breach its 2016 trough around 121.71.

The sheer speed of the move stirred speculation the Japanese authorities might intervene to restrain the yen. Japanese officials on Thursday warned markets that they would be on guard even over the Golden Week holidays on Friday and next week.

Some analysts, however, seemed un-convinced over how much Japan would do to rein in the yen.

“The steady hand on Thursday is consistent with the yen being some way down the BoJ’s list of priorities,” noted Sean Callow, a senior currency analyst at Westpac.

“With the looming G7 meeting re-inforcing the low risk of FX interven-tion, markets are likely to keep pressing their luck, with no obvious barrier to a test of 105.”

-REUTERS

Yen at 18-month peak as ≥egulato≥ wa≥ns speculato≥s

“In order to succeed, we must first believe that we can”

GLOBAL MARKET WATCH

HE SAID

Nikos KazantzakisGreek writer

(1883-1957)

Weekly Market Activity

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