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The East African : March 31st 2014
64 MARCH 29 - APRIL 4, 2014 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 4972.45 0.01% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 1,952.83 -0.49% USE All Share Index Uganda 1,500.00 1.64% RSE All Share Index Rwanda 145.97 0.05% JSE All Share Index South Africa 47,739.69 2.65% NGSE All Share Index 38,279.40 Nigeria - 1.80% BA eyes bigge≥ sha≥e of ≥egional ma≥ket A fter equipment shortages and market pressures con- strained British Airways’ operations in East Africa for some years, the airline is on the offensive again in the region. The carrier is expanding ca- pacity on its direct services out of Nairobi and Entebbe and also leveraging its relationship with fellow One World alliance member Qatar Airways to offer even more options out of the region. Edward Frost, BA’s newly ap- pointed commercial manager for East and Southern Africa, announced a fourth weekly service to Entebbe and an aircraft switch in Nairobi that will see a Boeing 747 replace the existing Boeing 777. The carrier reverted to three weekly flights out of Entebbe a few years ago and cut back capacity on the Nairobi route replacing the daily Boeing 747400 service with a B777. As the fleet situation eases with the entry into service of the Airbus A380 superjumbo and the lean B787 Dreamliner on key routes, the B747 is now back adding 780 seats out of Nairobi weekly, which Mr Frost said are the equivalent of an additional three weekly flights if the B777 not operate. Qatar flies once daily to Kiga- li and Entebbe, 18 times a week to Nairobi and double daily to Dar es Salaam. Other interlineagreements with Air Uganda and Kenya Airways will also allow triangulation between the other East African capitals and London through Nairobi. Elsewhere in Africa, British Airways is increasing capacity to Ghana, where it has deployed a Boeing 747-400 configured to four classes where, like Nairobi, it replaces a Boeing 777. Johannesburg remains the crown in the jewel with six A380 services operating as part of BA’s double-daily service to Johannesburg. BA is celebrating the fourth BA is celebrating the fourth service to Entebbe with discounted base fares starting at $144 for World Traveller; $344 for World Traveller Plus and $1,444 for Club world were to be retained. At the moment, BA only has direct flights to Nairobi and Entebbe in East Africa, but Mr Frost said a tie-up with Qatar would now offer more options out of these points through Doha and also open up other destinations such as Rwanda and Tanzania where BA does British Airways will replace a Boeing 777 with a Boeing 747 in Nairobi. Picture: File service to Entebbe with discounted base fares starting at $144 for World Traveller (economy) through $344 for World Traveller Plus (premium economy) and $1,444 for Club world (business class). But the airline will have to contend with a reenergised KQ, which will receive the first of its six Dreamliners this week with the rest to be delivered by the end of the year. KQ will also receive two Boeing 777s. Bu≥undi to amend law to allow mobile, agency banking BURUNDI HAS proposed amendments to its banking laws that could increase financial inclusion and offer lenders an easy expansion path. In a draft banking law that is currently under- going industry discussions, the country has proposed a legal framework that would allow banks to run agency, electronic and mobile banking services. It is a game changer. Burundi has one of the lowest banking pen- etration levels with the African development bank (AfDB) estimating that only two per cent of the population has bank accounts, and less than 0.5 per cent has access to loans. On the flip side, about one in every four Bu- rundians has access to mobile phones. Banks could use this accessibility to drive banking penetration. In Kenya for example M-kesho and M-benki, the mobile platforms by Equity and KCB respectively that allow customers to open bank accounts and transact through their mobile phones, have helped them net millions of new customers. But the most important change will be agency banking. For one, it will allow banks to reach areas that while having customers don’t have a critical mass to support a full branch. Secondly, agency and mobile banking can act as a great mobiliser of cheap savings for banks. It can also help cut costs. For example, Equity Bank and Co-operative Bank in Kenya now estimate that 30 per cent of total banking transactions are done through agents. Through the agency model, banks reduce their fixed cost per transaction as entrepreneurs who set up agencies pay rent and employees. Finally, agencies can act as a platform to cross sale other financial products like insurance thus helping deepen access. 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 Bank of Kigali g≥ows p≥ofits, dividends BANK of Kigali (BK) shareholders have a reason to smile after the country’s largest bank by assets increased its dividend payout by 70.7 per cent, buoyed by a jump in profits in 2013. Shareholders will earn Rwf11.1 ($0.02) per share up from Rwf6.5 ($0.009) last year, totalling Rwf7.4 billion ($11.1 million). This is attributed to the bank’s net income, which rose 25.4 per cent to Rwf14.8 billion ($22 million) from Rwf11.8 billion ($18.6 million). Although the bank’s growth was largely driven by expansion of its loan book, an increase in interest fees and commissions, analysts warned: ‘The risk is always around the quality of the assets as they expand their loan book. Appetite for BK shares is an- ticipated to rise. The share price has shot up 28 per cent since January to hit an all-time high of Rwf323 ($0.55). Analysts said that based on the bank’s investment in the expansion of its network, growth is likely to be sustained.
March 24th 2014
April 7th 2014