Wednesday, March 26, 2008


The dinosaurs were wiped out by a meteorite? Then mammals took over then the hominids..homo erectus, Neanderthal man then us(Homo Sapiens).Twenty years ago the Banking sector had 2 large foreign owned banks(Barclays and Standard Chartered)The other two heavies were Government owned(KCB and NBK).The rest of the banks and Building Societies were family owned i.e. owned by a businessman who lent to his pals/family and kinsmen.

Then the Banking crises of the 1980s and 1990s came along, and a number of the smaller banks folded. The surviving banks were bought by better entrepreneurs, merged and recapitalised.Out of these ashes arose Banks such as EQUITY(formerly Equity Building Society)

Fast forward to 2008.most of the banks are hardly family controlled. The few family owned and controlled banks are small and decreasing by the year through acquisitions.

There's another industry that is structurally in the same position Banking was 20 years ago.-STOCK BROKERAGE.

Most of the brokers are family/individually owned, the sector doesn't have many controls. The firms’ capital bases are small.

My take is that in the next 3 years most of these firms will be taken over by bigger players (read banks) and soon stock brokerage will be an extension of the banking business .e.g. CFC Bank +CFC financial Services, NIC Bank and solid Stocks.

In 3 years there will probably be more brokers licensed i.e. once NSE is demutualised.However,the business will probably be controlled by a few players who will be owned by banks.

Monday, March 10, 2008


For a long time the FORBES Billionaires list had only three Africans on the list. The Openheimer Family-heirs to the De Beers fortune,Johan rupert -BAT and Richemont and the Sawiris owners of the ORASCOM group.The Openheimer's and Rupert's are white Africans and the Egyptians are Arabs.(hope i dont seem racist).

Now we have two black Africans Aliko Dangote of the DANGOTE Group Nigeria and Patrice Motsepe of the ARM mining group( Patrice has a 5.5% stake in SANLAM the parent co. of Pan Africa Holdings -Kenya).

All great wealth tends to attract controversy.Dangote is accused of being too close to the former President Olusegun Obasanjo.Motsepe is accused of using black empowerment laws to enrich himself.

The FORBES list favours those whose wealth is in listed firms.Hence, as more of the developing world's capital markets become advanced, more Third worlders should make the grade.

Here's a link to an interesting BBC article on both.

By the way
The Nairobi Stock Exchange's Market Capitalisation(Value of all the shares listed on the exchange) is approximately Kshs 850 billion. Assuming 1US$ =Kshs 65, then the Market Capitalisation in US$ is 13 Billion.Motsepe's net worth is put at US$ 2.4Billion and Dangote's at US$ 5.5 Billion. do the math.