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The East African : Sep 8th 2014
56 SEPTEMBER 6-12,2014 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,160.32 0.41% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,421.67 0.17% USE All Share Index Uganda 1,779.00 1.08% RSE All Share Index Rwanda 143.60 0.28% JSE All Share Index South Africa 51,669.13 1.47% NGSE All Share Index Nigeria 41,085.24 -1.08% the region. The Tanzania mobile operator last week announced it would share Tsh14.25 billion ($8.7 million) of profits accumulated as interests on deposits held by customers on its mobile money account with customers and retailers. The company said it would redistribute the profits to its 3.5 million customers and depositors based on the average daily balance in their e-wallet, having received the go-ahead from the Bank of Tanzania, which issued the telcos with a letter of no-objection in July. Normally, money saved by customers in their mobile money accounts is held in a trust account that earns interest. In the case of Tigo, the cash was held in an account at the Bank of Tanzania. “The objective of this dividend is to offer all Tigo Pesa stakeholders an opportunity to share in this Tigo ≥ewa≥ds custome≥s with dividends T igo Tanzania has set a new bar for telcos in return on their investment depending on the e-value they have stored in their Tigo Pesa wallets,” said Tigo general manager Diego Gutierrez. Partly because of the lo- gistical nightmare of distributing the accrued profits to millions of savers, mobile firm companies have opted to deploy interest earned into CSR activities, an easier way of sharing these funds. And the sums involved can be large. The company said it would redistribute the profits to its 3.5 million customers and depositors “For the past three and a half years, the Tigo Pesa Trust has been accumulating returns at rates between 5 and 12 per cent,” said Mr Gutierrez. But with mobile companies increasingly launching new products like M-Shwari by Safaricom in Kenya and MPawa by Vodafone Tanzania, customers are increasingly accessing interest earnings products to store their money in. M-Shwari and M-Pawa are mobile based banking products that allow customers to save and borrow at interest. But the interest paid on such products is normally very low, partly due to the small size of an average deposit and the fact that most customers are retail and lack the ability to negotiate for higher rates. Also, these customers are more attracted by the efficiency and convenience that mobile money offers when they want to save money than the interest rates. Fi≥ms ≥aised $221m in bond ma≥ket in one yea≥ JUST HOW much money is flooding the market? Last week NIC Bank, the NSE-listed lender, said its Ksh2 billion ($22.2 million) bond was oversubscribed by 67 per cent. A similar Ksh2 billion ($ 22.2 million) bond issued by UAP was oversubscribed by 59 per cent. Britam’s Ksh3 billion ($33.27 million) bond was oversubscribed by 147 per cent, with the insurance firm exercising its greenhorn portion by mopping up an extra Ksh3 billion ($33.27 million), bringing the entire amount raised to Ksh6 billion ($66.5 million). Over the past year, data com- piled by The EastAfrican shows that Kenyan companies have raised about Ksh20 billion ($221.8 million) in the past year from the corporate bond market, increasing the size of the market by nearly a quarter. Other companies that have raised cash include Shelter Afrique and I&M Bank. Bond issued Institutional investors offered to take up 90 per cent of the NIC issue, while retail investors accounted for the remaining 10 per cent, an NIC Bank last week issued a $22.2 million bond. Picture: File outcome that was roughly the same for all the issued corporate bonds. The surge in the corporate bond market comes as the Central Bank’s Monetary Policy Committee said last week it would aggressively step up its presence in the money market in coming weeks as it seeks to halt the rise in inflation and the weakening of the Kenyan shilling. Analysts say the excess liquidity in the market could be driven by government sentiments. The high interest rates offered by lenders — averaging 12 per cent higher than the 9 per cent offered by Treasury bonds-- could also be an attraction. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories Seacom scales up ≥egional expansion plan SEACOM HAS launched operations in the Uganda market as the company scales up its regional expansion plan. The Internet service provider said it had acquired a public infrastructure provider licence from the Uganda Communications Commission and that it would now deploy two points of presence (PoPs) in the country. Byron Clatterbuck, chief commercial officer at Seacom, estimates that the deployment of the two PoPs will improve Internet access in the country by 50 per cent. “Our new licence allows us to Tigo said it will share interest with Pesa stakeholders depending on the value they have kept in their Tigo Pesa wallets. Picture: File own and operate our network all the way between Kampala and our international network. This will help bring more global connectivity to Uganda while improving the quality of the broadband experience for Ugandans,” said Mr Clatterbuck. Seacom Uganda will deploy one of the PoPs in Kampala at Airtel House while the other location is to be confirmed shortly.
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Sep 15th 2014