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Kenyan Wallstreet

Author: The Kenyan Wallstreet

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Listen to kenyanwallstreet.com Podcasts episodes free, on-demand. Get insights on business in Africa and the world as well as interviews with business leaders.
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Last week, the All-share index gained 2.4% in the wake of regulation seeking to ease listing. However, there are risks like a looming capital gains tax hike that will push the cost of investing and political risks with the upcoming election. Safaricom's dominance on the NSE is bordering a threat, where a suspension of trading due to material announcement would likely affect the whole exchange. Britam's share performance is because of losses from the fair value of property, and the Kshs 5 billion provision in their wealth management fund. Some of the company's prospects include looking for a strategic partner to boost capital in HF and help the bank recover.  Absa has had an oversupply in the market, with investors holding fort on both demand and supply.
In this episode, Ally Mwakaneno talks to TLcom Founder and Managing Partner Maurizio Caio on the algorithm of a great investment, why Africa's young startup ecosystem needs more venture capital, what is likely to be the next giant after fintech. Maurizio also tells the story behind TLcom's founding, its investment in portfolio companies like Autochek, Twiga, and uLesson. Highlights: A great investment opportunity would be a company operating in an attractive market, with a team with a compelling ability to articulate and execute a strategy, and have an entrepreneur willing to embrace the VC model of giving up sole ownership and leadership to accept the role of someone else on the board. Africa faces the challenge of a lack of enough capital, especially for fast-growing companies that need huge funding at early stages. The ecosystem also young and fragile, facing the challenge to become like Silicon Valley. On the other hand, Africa has advantages like little technology risk than other ecosystems and large private equity funds that almost guarantee its with PE funds, unlike other ecosystems. Unlike other ecosystems, Africa has minimal legacy systems, allowing founders to design companies of the 21st century pegged on values like sustainability and equality, offering a sandbox for VCs of the future. Fintech is an African giant because it is the most immediate application of tech, moving money, contracts, and lending. It shows the potential of technology outside the tech sector, extending the application of technology to other walks of life. The next opportunity after fintech will be dictated by great entrepreneurs, challenging investors to be more entrepreneur centric than sector centric.
Safaricom today announced that it is part of a consortium bidding for the telecommunications licences in Ethiopia, a high risk, high reward move since it only targets the telecommunication market. The move could drive its earnings in the short and mid-term, extrapolating Safaricom's growth in other markets.  Athi River Mining Cement is calling it quits, following its debt-fueled expansion and miscalculations in Tanzania. Its downfall is likely going to hurt many retail investors, calling for understanding of what it means to be a shareholder, the liability that comes with it and the necessary safety nets for investors. Liaison Group listing is a test of the NSE's power to raise funds for companies, as Liason is looking to raise funds for Africa's expansion through the IPO. Investors await the company's prospectus. 
In this episode, the minimum tax pause is a good break for small businesses. However, the conservatory orders only bar KRA from collecting the tax, which could change given that the agency appealed the ruling. The MTN and Cocacola listing on the RSE and JSE could present an opportunity for investors to look into regional markets. It also challenges other exchanges in the region like the Nairobi Securities Exchanges in the region to up their listings. Biden's tax policy on capital gains tax hike above $1 million was expected, dropping prices of all major cryptocurrencies. While it is likely to affect companies that hold crypto balance sheets like Microstrategy and Tesla, the currencies will likely peak in the long term.
In this episode, Nuru Mugambi shares her experience in rising ranks in the banking sector, the importance of recognizing women who are shaping their financial institutions and the financial sector and taking up opportunities like the Angaza Awards. Nuru also speaks of how remuneration, strategic opportunities, leading task forces, and promotions are key to recognizing women and overall talent in companies.
BAT's decline could augur well for investors willing to buy the stock for the long term. Jubilee's underwriting business mimics the underwriting business across the industry, which is not as profitable. Jubilee's premium investment in government securities differentiates it from the industry, which largely invests premiums in equities, making it an outlier. However, the company's dividend payout ratio is low, at around 10%, which would not give investors the dividends they expect. Investors could consider holding, as we wait to see the outcome of selling its general insurance to Allianz. African Hair's listing is still a wait and see as investors recount on burns on previous IPOs. Safaricom's upclimb is good for the long term. However, possible legislation requiring the company to share infrastructure would shed the company's market share. Similarly, discussions on the Airtel/Telkom merger could boost its capacity in major towns countrywide, making it a stronger competitor. 
The government's requirement for international ICT Companies to have at least 30% local ownership could be interesting for investors and give the government more control over the data they obtain and how they use it. EPRA's decision to maintain pump prices hit retailer's margins, although the regulator attributed the move to a weaker dollar. This is likely to affect lower-scale Oil Marketing Companies in the sector. A stabilization fund would help lower fuel prices, protecting the country from direct shocks from changes in global oil prices. Rwanda is making bold steps in e-mobility following its announced incentives in the cost of energy, taxes, and infrastructure. Nigeria's FX ban on sugar and wheat is another stance to protect the Naira, which would benefit from internal sustainability. As for the case of Turkey, the country is looking to control illicit flows of funds as investors await the presence of a regulator across crypto assets. However, like many other hitches to crypto, the ban is likely to follow a better comeback for Crypto as an asset.
Kenya's COVID debt would receive more public support if the funds could be accounted for, and have visible impact to people and small businesses. While IMF loans are receiving backlash, they are cheaper alternatives to other lenders,and serves as a form of refinancing. There is the option of the government selling its stake on listed companies, which will generate upwards of Ksh 800 billion. The dollar losing ground means that Kenya can make savings on dollar denominated loans, and expect slight dips on oil prices. However, there have been cases in the past when the dollar came back stronger.  Nigeria's SEC is hitting on platforms for offshore investments, and it is a classic case of African regulation failing to catch up with innovation, similar to the failure of regulators across the continent taking a backseat stance on cryptocurrency.  Finally, Kipchoge's 2 NFTs trailblaze a path for athletes, and brand ambassadors to explore the NFT space, giving them opportunities to make more money. 
Equity Bank's share dipped by 8.29% after the bank failed to declare a dividend. This, however, is a short term reaction given its strong financials and picking digitization strategy. The MPC is likely to maintain status-quo interest rates, as reducing the rates would not favour banks as much as it would favour borrowers. NCBA reported a 41% profit decline with a significant hit in earnings per share, declaring a dividend nonetheless. The new measures in five counties are likely to affect EABL. However, the effects will be negligible given that the lockdown affects five counties only, and EABL has taken steps to promote online sales. Changes in leadership outlook in Tanzania and the discovery of a new variant could change its COVID-19 measures, affecting EABL's performance in the country. EABL and UNFPA have cancelled their affiliation with Homeboyz Radio, a subsidiary of Homeboyz Entertainment but the effects are likely to be short term. 
In this episode, the Kenyan Wallstreet and HIsa Team talk about how the new movement restrictions in response to COVID-19 are necessary to protect lives but highly inconsiderate for businesses facing high taxation and students who just resumed schools. While Safaricom's 5G's launch means well for the future, it was a rushed decision, given that as of last year, only 16% of mobile devices countrywide supported 4G. The insurance sector is still taking blows from the pandemic, evident in CIC and Sanlam results. Elon Musk is a genius for trading depreciating teslas for appreciating bitcoin. 
Esther Ndeti shares her experience transitioning from a business founder to an Executive Director at EAVCA, a representative organization for private equity and venture capital funds in East Africa. She also talks about Kenya's venture capital space compared to other African countries, her experience with women in VC in East Africa, gender representation in both funding and startups, and the importance of celebrating and showcasing the work of women in the finance and banking space. 
HF is up by 9.94% after Britam announced plans to sells part of its stake in the business to a bank, which could help its long term recovery depending on the buying bank. However, the rally is driven by speculation as the details of the transactions are still in the works. Parliament has halted the bill seeking to nationalize KQ, which faced numerous challenges last year because of the pandemic likely to affect its results. Carrefour's success in Kenya rides on proper management of agreements with suppliers and direct sourcing. Quickmart's PE investment could point out to its strength as a business.
Fuel prices are on aiming for the moon, banks have reported less profit and Tanzania lost a sitting president. Listen to the team explain why the high prices are not a tax issue as most of us think, shed light at the end of the dark tunnel of COVID hit banks, say a word about the late Magufuli, and write their wishlist for Samia Suluhu.
In February 2021, Uncovered Fund launched a $15 million fund to invest in early-stage startups in Africa. Ally Mwakaneno talks to CEO of Uncovered Fund CEO Takuma Terakubo on why they chose Africa, their areas of interest and why he started the venture capital.
In this episode, the Kenyan Wallstreet and Hisa Team discuss how foreign investors are exiting local markets, hoping that banking sector results will turn the tide. We are likely to see an increase in bond buying, which will reduce interest rates after the stimulus check caused asset price inflation. Investors fear that the next stimulus check will fuel inflation, hence outflows from emerging markets. NMG week on Week decline is a result of profit-taking, despite long term prospects in its digital strategy.  The team also discusses KCB's partnership with Huawei for a decentralized digital banking product.
In this episode, the squad discusses KRA's demand for Ksh 73 million in taxes from Mobius Motors, what to expect in NMG"s stock after results announcements, what the Flutterwave unicorn means for African startups, and how NFT's could benefit digital creators. 
Stanbic's income dropped by 18.6% to Ksh 5.2 billion with a notable reduction in net interest income, which fell by 4.8% while loan loss provisions rose by 54% following reliefs and restructured due to  COVID-19. However, the bank grew its deposits, loans and investments. There are 18 profit warnings, with more expected to come.  The banking sector is expected to be more resilient compared to other sectors, despite more profit warnings from the sector.  Safaricom declined by 3.7%, a profit-taking by investors given the recent gains. Investors a taking a wait and see approach given the expected Ethiopian licence. The recently passed US Stimulus package is likely to lead to asset price inflation.
Eva Mattheeussen, HR Head at DHL Global Forwarding MEA and Global Project Lead of ‘Women at DHL Global Forwarding talks about how the COVID-19 Pandemic has affected women differently in their careers, the journey to achieving 1 out of 3 women in the leadership Boards, the Women in DHL initiative and where she imagines gender diversity in 5 years. She also shares her experiences on internal networks, partnerships and mentorship is opening more opportunities for women. 
In this episode, the squad analyzes the impact of the Minimum taxes on manufacturers and startups, takes stock of the lowering business confidence in the country and explains why Tanzania's economy outgrew peers in the EAC in 2020. It also looks at what Google's new privacy push means for advertisers and how Square is leveraging creators in the new Tidal Acquisition. 
Kenya Power's rising financial costs are expected to be higher in FY2021. Its operating expenses for FY2020 ate up all its gross profit.  We are still watching how EAPC's restructuring will mean for the company but hopes are low whereas there is hope for the long term prospects for Unga Limited despite blows from higher commodity prices and high finance costs.  Foreign investors are taking a net selling position on counters such as KCB and Equity, awaiting the financials in March following the impact of COVID-19 on Non-Performing Loans. 
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Comments (3)

crispyslim din

Thanks for talking about the suez cannal 👍🏽

Mar 27th
Reply

Modestar Kimani

I think we should also expect to see a relatively slight decline in share price of big tech companies like google, facebook and the likes, due to the biden campaign on the expansion of the antitrust cases against this big tech companies.

Jan 12th
Reply

Bond Nthenge

I'd love to listen to this podcast but it's hard to listen with all the banging around, it takes away from the conversation....I stopped listening 2 minutes In

Feb 14th
Reply
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