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Tuesday, February 9, 2016

NHIF BOSS KIRGOTTY SHOWN THE DOOR

National Hospital Insurance Fund CEO Simeon ole Kirgotty has been shown the door after his three-year contract lapsed.

Kirgotty was said to have been fighting for a renewal of his contract but that was not forthcoming.

He has recently been in the media talking about enhanced payments by the Fund for different conditions that patients go to hospital with.

The Finance Director Geoffrey Gitau Mwangi will act until a CEO is appointed.

This is even as some within the Fund call for a lifestyle audit of the FD.

Kirgotty's last day of service was said to be Friday last week.



Wednesday, January 27, 2016

NSE TAPS SIX BANKS TO CLEAR ITS DERIVATIVES TRADES

The Nairobi Securities Exchange will not clear and settle trades itself but will use six local banks to function as the Central Counterparties to trades to ensure clearance and settlement without default by the traders.

The six are Barclays Bank of Kenya, Cooperative Bank, CFC Stanbic, Chase Bank, NIC and CBA Bank.

Derivatives are contracts who take their value from the value of an underlying asset such as a commodity or financial instrument.

For example when an insurance company insures my car against an accident, the value of the premium (derivative) will be based first and foremost on the value of my car hence a higher premium for a new car. That is a rudimentary derivative credit default type contract although finance experts deny this to avoid bringing derivatives under insurance regulations.

The NSE will kick off its derivatives market with what are called futures before introducing options.

Futures also known as forward contracts are simply agreements to purchase an underlying commodity at a set price at a set time in the future.

Unga Flour Mills can for example visit farmers in the North Rift and secure contracts to purchase in six months time, when the harvest comes in, maize at Sh3000 per 90Kg bag.

That is a forward contract.

If drought hits and the price of a 90Kg bag shoots to Sh4000, the farmer may want to opt out of the contract and avoid losing so much money.That is not Unga's problem, there is a contract in place.

But to keep things orderly, Unga can then do another contract saying they agree to sell in six months a 90kg bag of maize to the farmer at Sh4000.

This would free up the farmer to go and explore the market prices and just pay Unga Sh1000 without delivering the maize.

Alternatively, if the two were trading on the NSE, the farmer could have shopped around his contract to a third party and exit the deal leaving that third party to figure out where to get and deliver the said maize at the given price from,

In reality, the NSE derivatives market is expected to feature hundreds if not thousands of such trades where traders take positions based on what they think the future price of a commodity or stock or currency will be.

If the price of a stock a trader has taken a position on goes up, he can choose to take the gains and exit by selling to another trader his contract.

To avoid players defaulting if they lose too much money on a bet gone bad, the six banks appointed to act as clearing houses will come in between the trades and act as the counter parties.

They will most likely demand a collateral deposit from the traders known as a margin to cover their risk or at least partially cover their risk of defaulting.

Once the market has matured, the NSE has said it will look to introduce an options market which is another kind of derivative.

These can be either Call or Put options.

The last major Put option seen in this market was one which was issued by TransCentury to its then partner in Rift Valley Railways, Citadel Capital. Essentially, it asked Citadel Capital to either buy TC's stake in RVR or exit the utility.

Unfortunately for TransCentury, Citadel called its bluff and came up with the money to buy out the local firm.

The NSE is expected to give more details as to commencement of trading of derivatives on its platform.


Thursday, January 21, 2016

NATIONAL BLACKOUT AS NAIROBI NORTH LINE OVERLOADS

A national blackout has hit the nation with only the Western part and the North Rift left unaffected.
This indicates that the Nairobi North line that brings power to the capital from the Ol Karia area may have become overloaded.
KPLC engineers are said to be working on resolving the issue.
Moves by the local community in Suswa and at Kajiado to block high voltage lines being built by Ketraco has left the nation vulnerable to such blackouts as the Nairobi North line cannot handle the additional capacity broyght y the 280Mw geothermal power plants at Ol Karia.
The Nairobi North line runs from OlKaria to the Dandora substation.

Tuesday, January 19, 2016

GOTV DOMINATES TV DECODERS IN HOUSEHOLDS

GOTV has the lion's share of TV set top boxes (decoders) in the country, a new poll by Geopoll indicates.

Out of an expected 1.75m TV owners who subscribe to pay TV, approximately 720,000 or 41% have bought the GOTV decoder, the December data shows.

Rival Startimes with about 400,000 subscribers takes 24 per cent of the pay TV market.

The survey was carried about a year after the government began to switch off analogue TV transmission in favour of digital.

Satellite pay TV DStv takes another 20 per cent.

The figures would indicate GOTV to have grown from the 37 per cent share it had in February 2015, when Ipsos-Synovate released a poll on the same.

Startimes has remained relatively flat as at that time it had a market share of 23 per cent.

GOTV has invested heavily in local productions and sports including soccer and darts tournaments in a bid to serve more relevant content to its audience.

30 per cent of the decoders in the market are free to air, or unauthorized streaming gadgets.

Prime Time audiences continue to watch the big 3 TV stations, Citizen, KTN and NTV who command with 73 per cent of the pie.



KENYA AIRWAYS (KQ) FIRES FINANCE DIRECTOR ALEX MBUGUA

Kenya's national carrier, Kenya Airways has fired its Finance Director Alex Mbugua amidst escalating financial losses that have virtually wiped out the company's equity.

In a terse statement to staff, Chairman of the Board Dennis Awori said Dick Murianki would assume acting Group FD position until a competitive recruitment is done.
Murianki has been the General Manager, Cargo.

The move seen as long overdue comes after KQ experienced one of the worst corporate losses on the African continent with a Sh29billion pre-tax loss in the last financial year.

Mbugua has been at the helm of the carrier's financial operations during which it has suffered multi-billion shilling losses, each accompanied with various explanations.

The company was first caught out by the surge in global fuel prices in 2008 when it hedged fuel at about US$100/barrel before crude prices plunged to US$45 that same year leaving it with obligations to pay Citibank US$65 per barrel.

The company was also caught off-guard when the Boeing 787 Dreamliners it has ordered delayed in shipping from the original 2009 delivery date.

KQ had already planned for the phase out of its ageing 767 jumbo jets but had to renegotiate new expensive leases.

A strike by staff cost the company close to Sh1billion in revenue and the Eurozone crisis, Terrorist attacks and the devastating Ebola outbreak in its bread and butter West Africa market served devastating financial blows to company fortunes.

Frenzied lobbying in a bid for the top job after the retirement of former CEO Titus Naikuni by Mbugua did not work as the position went to Mbuvi Ngunze, who had been brought in, in 2011 as Chief Operations Officer.

With new board members including the highly respected Dr. Kapkirwok, seen by many as the true architect of the success KQ enjoyed in the early to mid 2000s when he was in charge of strategy, KQ is seen to be on the road to recovery.


Saturday, January 16, 2016

NEW KPLC TELEGRAM BOT GIVES YOUR POWER BILL INSTANTLY

Kenya Power, the monopoly power distributor, has released a new, faster way of getting your power bills using the fast-growing Telegram instant messenger.

Telegram is a service like Whatsapp but with a lot more features including programs called bots which can be programmed to respond to queries.

The Kenyapowerbot for example allows you to input your post-paid account number and get your bill instantly.

You can access the  @KenyaPowerBot at https://telegram.me/KenyaPowerBot

Once there, you select whether your query is for pre-paid or post paid service.

A home menu as shown appears from which you select your query.



For query on pre-paid services, like like Token loaded. you will need to input your 11 digit meter number.

For post-paid customers, to get your post paid bill you will be prompted to input your account number and the balance will be sent back promptly.


This is a first for Kenya Power not known particularly for cutting edge innovation but with this it looks like the utility giant is finally beginning to place premium on technology and customer service.

Telegram bots operate using commands that begin with a back slash "/".

To get the list of commands you simply type /help

You can create your own Telegram bot by visiting the Botfather for registration and referring to the Telegram Bot Application Programming Interface (API) manual.



Friday, January 15, 2016

KDF SCRAMBLES JETS TO SHELL SOMALIAN REGION OF ATTACK

KDF jets have been bombing the El Adde, Gedo region where attackers calling themselves AlShabab, stormed a military base leaving an unknown number of casualties.

El Adde is occupied by Kenya Defence Forces (KDF) serving under AMISOM.

Quoted sources said, the offensive started with a suicide bomber exploding in a car at the entrance to the base. Following the explosion, heavy fire started and the extremists stormed the base.

The attackers said they made away with military equipment, vehicles, artillery and other supplies. Villagers reportedly also looted the base.

Residents of Wajir first reported hearing low flying jets in the area before it became apparent that it was KDF planes gearing for the counter-assault in the region.

Kenya uses the Northrop F5/Freedom Fighter jets such as the one pictured.

Somali journalist Tuuraye who covers AlShabab tweeted that the attack was carried out by the so-called Saleh Nabhan brigade. The group is said to be named after a Kenyan terrorist killed in Somalia in 2009 by the US.

KDF in its official release to newsrooms said casualties were yet to be known.

Kenyan President Uhuru Kenyatta confirmed the attacks and vowed the casualties suffered would not be in vain.

Kenyans with relatives serving in the war torn country are still trying to get through to them to establish their safety.