Orange Kenya To Launch A 'Unique' Money Transfer Service

Orange Kenya will today launch a mobile money transfer service that is set to rival M-PESA of Safaricom.

Chief executive officer Mickael Ghossein in an earlier interview with Nation Media, had said that the service was going to be ‘unique’.

“We have taken long to launch it because we didn’t want to replicate what is already in the market,” he said.

Service had been st for launch in June this year, but it had not received approval from the government.

KenolKobil replaces East African Cables in the 20-share index constituent

The Nairobi Stock Exchange has revised its benchmark index replacing East African Cables with Kenol Kobil Limited. The index that we estimate is trading on a 15.1x trailing P/E has become increasingly skewed toward the large cap stocks. The yield profile for the index has declined due to the rising market valuations but provides investors with a good opportunity to gauge the viability of the risk premium. The NSE Index dividend yield has dropped from 4.36% in December 2009 to 3.65% by September 2010 while the earnings yield has dropped from 7.51% to 6.62% during the same period. This shows that there is a premium building up as interest rates on short term securities declines. The index has been changed three times over the past three years. In July2008 Safaricom Limited, Equity Bank Group, East African Cables and Athi River Mining were added, while in December 2009 Co-Operative Bank of Kenya was added to the NSE 20 Share Index. We believe the move was motivated by the improved earnings profile and secondary market liquidity for KenolKobil versus its industrials peer. See below the changes in the P/E for Kenya’s benchmark index.

Commentary
The Index is fast approaching a historistic support area of 4,700 – 4,800, together with the decreasing range of the NSE (High-Low). Usnig the week on week on data we can see the support and resistance levels will not be broken through. The apparent strengthening of the trend as experienced in August was not supported by trade volumes and the index has since been trading between 4,450 pts and 4,685 pts since.
While the mid term and long term trends (100 week MAs) point to a continued up trend, momentum has been declining from Mid-August 2010 and we could see the 4,200 mark support level retested as the index oscillates in a range sideways.

Dyer and Blair Investment Bank

Safaricom to start testing 4G technology

NSE Listed telcom firm Safaricom is expected to start technical trial of the 4G (fourth generation) technology on its network within the next two months. The roll out of the next generation Long Term Evolution (LTE) technology (4G) will be carried out by Huawei Technologies company from China.

Safaricom and Huawei signed a three year strategic partnership under which Safaricom selected Huawei as its vendor of choice for the supply of its core network requirements, and roll out the fourth generation network at a cost of 12 billion shillings.

Speaking during the signing ceremony held at Huawei headquarters in Shenzhen China, Safaricom Chief Executive Officer Michael Joseph said the company was also keen to overhaul its billing system, core network and expand its 3G network coverage throughout the country.

“We are going to do a technical LTE trial on our spectrum to see if it suits the Kenyan market and its commercial viability. This is completely a technical trial and not a commercial trial and we are going to do the trials within our spectrum in the next two months.”

Michael Joseph said once the 4G network becomes operational, Safaricom customers will be able to enjoy high speeds of 600 megabit per seconds or 1.5 gigabit per seconds in both downloads and uploads. The new technology will enable Safaricom to deliver a combination of services like data, voice, and video and download services like iTunes which will be billed through a different charging system.

He said in the next two years the company will overhaul its current system to march the precepts of the LTE technology .The first phase will include installation of the operating system for the prepaid system, followed by upgrading of the postpaid system which will later will include converging both systems to have one billing system. “We believe this will enable our customer service unit to monitor the customers’ calling histories and their tariff plan on one screen,this will be a superior customer service platform.”

The upgrades are expected to begin in the next six months and will be done in two phases.

CMA SHOULD BE EMPOWERED TO PROSECUTE STOCK MARKET CROOKS

The colapse of Francis Thuo and Partners, Nyaga stock brokers and Discount Stock brokers is still very fresh in my mind. The colapse of the three stock brokers in quick succession in a span of three years triggered a confidence crisis in Kenya capital market. The three stock brokers collapsed as a result of a huge debt incurred through unauthorised sale of of investors shares. They held an estimated sh 2.7 billion of investors money at the time of collapse.

These are companies which were controlled by greedy self seeking individuals who only cared about maximizing profits for themselves. I can just imagine the shock of an investor who has built his investment portofolio for years to cater for his retirement,only to find that his broker sold all his shares long ago without his knowledge.And while all of this was happening, the Capital Markets Authority was unable to protect him from these stock market criminals.

It is about time CMA was given power to investigate, ban individuals from trading and shut down stock brokers found in breach of trading rules.Therefore, the responsibility lies with the Kenya parliament to to pass new laws that will give CMA the power to supervise the capital market.

The new laws should also free CMA from Treasury`s control and turn it into an independent institution with a board free from political control.This will help stop politicians from dishing out key jobs to their unqualified political cronies at the expense of qualified professionals.

A majority of CMA board members should come from the private sector. Currently the board is made up of the Attorney General, the Central bank Governer, the Finance permanent secretary and the Economic secretary. The Finance Minister Picks the rest of the board members.

But there is fear that reduction of government control will leave CMA without any money to perform its functions. Well that fear is understandable but CMA should adopt a hybrid financing model with most of the financing coming from the market and the rest from treasury.Currently CMA has been making a good income as a result of increased earnings from commission fees charged on new market products and listing fees from bonds and IPOs.