A good 2012 for Investors at the NSE

NSE was the second best performer in Africa and Middle East, after Egyptian Exchange (EGX) and eighth globally.

According to the annual market performance indices released by the Nairobi Securities Exchange, 2012 was definitely a good year for investors at the Nairobi-based bourse. Closing the year at Sh1.27 trillion, the bourse was also the second highest gainer among stock exchanges in Africa and the Middle East.     

An investor at the NSE closed the year 40 per cent richer according to the All-Share Index, a new indicator of the market performance while the benchmark NSE 20 share index that tracks blue chip firms rose by 28.95 per cent to close at 4,133.02 points.

Pradeep Paunrana is the richest Kenyan on Nairobi Stock Exchange

Ventures Africa has released the 10 richest Kenyans on the Nairobi Stock Exchange (NSE) based on top investors holdings at NSE as at the end of trading on Friday, December 14, 2012.

Athi River Mining Ltd CEO Pradeep H. Paurnana

Kenyan CEOs have shown that they own considerable shares in their companies and are also good investors at the bourse. Athi River Mining Ltd CEO, Pradeep H. Paunrana , tops the 10 richest Kenyans on the NSE list that includes Equity Bank CEO James Mwangi, Scan group CEO Bharat Thakkar, Co-founder of the NSE and Dyer and Blair CEO Jimnah Mbaru, and industrialist Chris Kirubi.

Other CEOs with considerable stake in their companies but missing in the list include AccessKenya Group CEO Jonathan Somen, Co-operative Bank of Kenya CEO Gideon Muriuki and Rea Vipingo Plantation CEO Neil Cuthbert.

UAP Names Dominic Kiarie new MD

On  Thursday, the Board of UAP Holdings Ltd announced  that Deputy Group Managing Director Dominic Kiarie will  take over the position of retiring Group Managing Director, James Muguiyi.

Muguiyi who has been with UAP for the last 30 years, has overseen the growth of the group’s business in Kenya and expansion into Uganda in 2004, South Sudan in 2005 as well as into Rwanda and DRC in 2012.

NSE Introduces Virtual Stock Trading

The Nairobi Securities Exchange (NSE) has opened up a new avenue for individuals wishing to trade at the bourse using a simulated online trading platform.  

The initiative, which is supported by the Kenya Association of Stockbrokers and Investment Banks (KASIB), will have interested individuals go through basic train before they acquire virtual accounts to explore the world of stock markets.   

KU Students win NSE Investment Challenge 2012

The team of Michael and Joseph from Kenyatta University were announced the overall winners of the year’s Nairobi Securities Exchange Investment Challenge at an award ceremony graced by Assistant Minister for Youth and Sports Hon. Kabando wa Kabando on Wednesday.

The competition, which ran from June to August, gave participants Sh2 million in virtual investment capital and real time market information with which to make trades. The winners were then selected by a panel based on the value of their portfolio at the end of the challenge, level of research, and participation in the provided discussion forums.  

Speaking at the award ceremony, Director of the NSE, Jonathan Ciano said; “The NSE Investment Challenge is the flagship Corporate Social Responsibility initiative of the Nairobi Securities Exchange. We believe that it is our duty as a financial institution to help create a more knowledgeable society by increasing both access and understanding of securities markets information.”

Other top contenders included Kelvin Kiplagat, a law student at Moi University, who posted the highest profit of Sh1 million to hold a portfolio of Sh3 million when the competition came to a close. Lack of enough research and participation in discussion forums were the biggest undoing for Kiplagat who many thought would win the coveted award.  

The overall winners pocketed Sh200,000 in cash to be invested at the Bourse, while the runners-up and second runners-up walked away with Sh75,000 and Sh25,000 respectively.  

This year’s award attracted 5,621 participants from 172 institutions some coming from as far the United States and Europe.

NSE Investment Challenge is an initiative of the NSE and Smart Youth Investment Ltd with NIC Securities and Centum Limited serving as its main sponsors.

For more on the NSE Investment Challenge and how to participate visit http://www.nse.co.ke/public-education/nse-investment-challenge.html

Erafinancials.com to benefit investors at the NSE

South African-based El Escrow Research and Analytics Limited (ERA) has unveiled a unique local research unit that will package and sell Kenya’s historical economic data.

Erafinancials.com will offer policymakers, managers, securities and economic analysts access to a structured historical database of all listed companies in the Nairobi Securities Exchange (NSE) and key indicators such as inflation trends, share prices, treasury bill rates among other compiled datasets from a decade ago.   

According to the Erafinancials website, the platform combines modern mathematical financial techniques, advanced technology and applies time series techniques to manage data trend analysis, regression and correlation leading to forecasting of various indicators and variables.  

The service will benefit investors who currently suffer from the scanty data available locally and have to rely on the likes of Bloomberg and Reuters for their vast datasets on various global companies.

It took the firm 18 months and expenditure of up to Sh20 million to compile the database, which can be accessed from as lows as $5 (Sh420), for a one-off viewing up to an annual charge of $500 (Sh42,000) for the entire product.  

El Escrow also plans to expand to neighboring Uganda and Tanzania. 

Investing in the Nairobi Securities Exchange lessons

As Warren Buffet, arguably the greatest investor in history said, “Never invest in a business you can’t understand.” Investor Education is what novice investors in the world and Kenya in particular are missing.

Over the years, Kenyans have fallen victim to Pyramid schemes (fraudulent ‘investment clubs’) leaving stockbrokers, brokerage firms, and other stock market experts to blame unmitigated gratuitous speculation and inept investment strategies. However, the problem lies deep on overlooking of basic literacy in investing and finance as a whole.  

A stockbroker whose roles may range from determining market values to giving investment advice to their clients will rarely educate you on the much-needed basics, which is the only safeguard for any investor and especially those wishing to start investing in the stock market.

As stated by Ben White in ‘Top 5 mistakes made by investors Africa’; Lack of Knowledge has been identified as one of the biggest challenges to African investors.

Uganda is quite different from Kenya. Ethiopia is a world apart from Nigeria. Each of the continent’s 55 countries has a unique regulatory environment and tax regime. Investing in one country come with different terms, possibilities, and restrictions than another.

Too often, there is a lack of planning in advance. Research needs to be conducted on the target market before investment s can be made into particular ventures. Is there a minimum capital requirement in country, is this legislation up for renewal, how can capital eventually be exited, how does the tax system historically deal with the sector? Many questions and areas need to be considered in order for an investment to make sense long term.

An alternative to the consensus opinion or what may be considered mainstream investing is contrarian investing. In finance, a contrarian is an investor who seizes the opportunity to buy shares of stock when other investors are busy selling and sells when others are buying.

A good example from Wikipedia, widespread pessimism about a stock can drive a price so low that it overstates the company’s risks, and understates its prospects for returning to profitability. Identifying and purchasing such distressed stocks, and selling them after the company recovers can lead to above-average gains.

Conversely, widespread optimism can result in unjustifiably high valuations that will finally lead to drops, when those high expectations don’t pan out.   

Amazingly, the world’s third-richest person Warren Buffett is a contrarian, who believes that the best time to invest in a stock is when shortsightedness of the market has beaten down the price.

Kenyans who are new or want to start investing at the Nairobi Stock Exchange visit this resourceful site http://www.contrarianinvestingkenya.info for more about investing in NSE. The investor education section starts with the elementary Price to Earnings multiple (PE), and how to apply the PE ratio. 

Uchumi set to open three outlets in Uganda

After re-listing in the Nairobi Securities Exchange (NSE) on 31^st May 2011 the supermarkets chain is planning to open three new outlets in Uganda. Uganda which has been identified as highly potential but underserved by retail chains is expected to have a total of five Uchumi stores which include the already established ones in Kampala and in Gulu town.

The company which receivership was lifted about six years reported sales of 10.84 billion shillings (approx. $129.7 million)  in the year ended June 2011.