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The East African : Jan 12th 2015
52 JANUARY 10-16,2015 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,121.76 0.08% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,568.71 0.78% USE All Share Index Uganda 1,931.00 3.32% RSE All Share Index Rwanda 135.52 0.25% JSE All Share Index 49,209.77 -1.06% South Africa NGSE All Share Index Nigeria 30,143.02 -13.03% East African partner states has attracted new players who are keen to trim the margins enjoyed by Kenya Airways, the route’s dominant carrier. Kenya’s East African Safari Air Express has launched a direct line from Nairobi to Entebbe which it says is part of its strategy to get a slice of the regional aviation pie. The twice a day flight will be available six days a week starting yesterday. The service is expected to introduce competition after the exit of Air Uganda from regional routes led to increases in air ticket prices. Air Uganda’s air opera- tor’s certificate was revoked last year by the Uganda Civil Aviation Authority (CAA). Travellers to Uganda are hoping Sax, the code for the new service, will enhance competition on a route that has already attracted RwandAir. A direct flight between Nairobi and Kampala on the Rwanda carrier currently cost $250 while a Ugandan Transport Minister Stephen Chebrot cuts a cake at the launch of a direct flight from Nairobi to Entebbe by East African Safari Air Express at Entebbe Airport. Pic: Eric similar air ticket costs $370 aboard Kenya Airways. Sax is expected to offer fares starting at $99 for a oneway ticket excluding taxes, which usually account for about half of the airfare. Speaking at the flight launch at Entebbe Airport, Uganda Transport Minister Stephen Chebrot said tick- ets on the routes were quite expensive, having reached $750 at one time. “The cost of fuel includ- ing the aviation fuel has gone down but why are the airlines still charging the high fares they were charging when the fuel cost was high?” Mr Chebrot asked. Last month, Ugandan Sax is now looking to increase its aircraft ahead of the launch of a direct flight from Mombasa to Entebbe. Sax launches di≥ect Nai≥obi-Entebbe flight T he high cost of flights between Uganda and its and South Sudanese delegations attending the Heads Of State Northern Infrastructure Summit complained of high airfares and called for liberalisation of the routes. “Competition is what will tame the fare levels. We bring to the Ugandan market a good product at a competitive price and also a reliable option,” Sax chairman Charles Wako said. President Yoweri Museve- ni’s government has permitted a number of airlines to fly from Uganda to Nairobi, Arusha, Juba, Congo and Dar es Salaam in a bid to tame the prices. Last year, Uganda li- censed three new airline operators; Fast Jet, which is registered in Tanzania, Fly Dubai, registered in the United Arab Emirates, and Cargo Operators, which is expected to start its operations in May this year. However, their impact on prices has been dampened by passenger perceptions of the quality and reliability of rival carriers. Who should collect the capital gains tax in Kenya? PLANS BY the Kenyan government to raise Ksh7 billion ($78 million) through the controversial Capital Gains Tax (CGT) face serious snags as confusion reigns over whether stockbrokers should act as tax collection agents. The Kenya Revenue Authority in- sists that under the law, the intermediaries are obliged to collect and account for CGT. The brokers in turn argue that their systems are not configured to compute the tax. “There is no ambiguity. The law provides clearly who should collect the tax,” said John Njiraini, Commissioner General, KRA, saying there were teething problems whenever a change was being effected. Turnover fell The confusion has slowed activity on the Nairobi Securities Exchange (NSE) with foreign investors beating a hasty retreat. Last week, Equity turnover fell by close to 60 per cent from Ksh533.36 million ($5.86 million) on Tuesday to Ksh214.45 million ($2.35 million) at the close of the trading session on Friday. According to KRA the reference price for stocks acquired before January 1998 will be the highest price achieved for the shares in 1998 while for stocks purchased between January 1998 and December 2004 the reference price is the highest price achieved for the shares in the year of purchase. Reference price For stocks acquired from January 2005, the reference price is the actual price as reflected in the Central Depository System trading. KRA plans to collect capital gains tax on property transfers together with stamp duty. Property vendors are expected to provide data as part of the stamp duty valuation including the date and cost. iTax platform KRA is now developing an elec- tronic module to allow property transfers to be transacted online through the iTax platform. The automation, expected to be completed by March 2015, will connect land registries countrywide to the iTax platform. 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 Ugandan co≥po≥ate chiefs have come of age FOR YEARS, Ugandan nationalists have frowned at the near absence of local talent at the helm of a major financial institution. The announcement on January 7 that Patrick Mweheire had been picked to replace Phillip Odera as the head of Stanbic Bank’s Ugandan unit should then be welcome news. Mr Mweheire becomes only the second Ugandan after Herman Kasekende (chief executive at Stanchart Uganda) to head a major bank, probably marking the coming of age of Ugandan corporate executives who have been under the tutelage of mostly Kenyan expatriates. Having worked with Merrill Lynch & Co in, New York and Renaissance Capital in London and Nairobi, Mr Mweheire joined Stanbic in 2012 as the head of corporate and investment banking division, where he helped double the portfolio to Ush190 billion ($67 million) in three years.
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