Good morning,
it is a new month and I wish (Hopefully you do too!) that July will not be as cold as June!
Last Month, a report by the Kenya National Bureau of Statistics reported that inflation in Kenya rose to 6.32% in June compared to 5.87% in May. The report attributes the jump to the increased cost of basic foodstuff and fuel.
Here is a breakdown of the report:
The Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households, increased from 114.977 in May to 115.110 in June.
Food and non-alcoholic drinks index increased by 0.06% in June. This index amounts to almost 32.91% weight in the basket of goods consumed by households.
A kilo of sukuma wiki was KSh55.83 in June, compared to KSh53.98 in May.
Households and businesses consuming 200 kilowatt-hours (kWh) spent Ksh 187.73 more in June than May, while those using 50 units of power paid kSh46.93 more
Capital Markets
1. CMA issues license to 5 coffee brokers
Last week, the Capital Markets Authority issued the first set of licenses to five coffee brokers in line with the Capital Markets (Coffee Exchange) Regulations 2020. The licenses allows the brokers to carry out coffee brokerage services at the Nairobi Coffee Exchange (NCE).
Only Meru County Coffee Marketing Agency Limited was granted a full license while the other 4 were granted conditional licenses for upto 3 months to enable them fully comply with the requirements of the coffee exchange regulations set out in regulation 9 and part II of the First Schedule.
2. Family bank issues their corporate bond
On the 1st of July, Family bank issued their corporate bond marking the start of Family Bank trading at the Nairobi Stock Exchange (NSE). The portion of Family Banks’ Medium Term Note is listed under the Fixed Income Market Segment at the NSE and will have a fixed annual interest rate of 13.0% until maturity on December 17, 2026.
What is a Medium Term Note ? 👇 👇
Medium-term note (“MTN”) enable companies to offer debt securities on a regular and/or continuous basis. As compared to other forms of debt securities, MTNs tend to have their own type of settlement procedures and marketing methods, which are similar in some respects to other bonds offerings. Although medium- Term Notes typically have maturities of between two to five years, they are not required to have medium terms. It is common for companies to issue both short-term and long- term securities under an MTN Programme.
Investing Guide (for beginners)
4 P’s of Investing
Following the recent tussle between Cytonn and some of its investors (check out our previous post on the same), Financial scams and investment scams has once gain become the topic of discussion. Many Kenyans have fallen victim to Ponzi schemes.
This week, we will share a guide - The 4 P’s of investment- which is a secret used by the Managing Director of Nabo Capital
P (Partner)- are you comfortable with the person/ company you are trusting your money with?
P (Profit) - What is the companies’ or person’s track record in the management of profitable investments?
P (Potential) - is the investment idea proposed by the company/person still viable going to the future
P (Price) - Pay a reasonable price for investments and do not overpay.
International Tax
A 15% Global Minimum Corporate Tax,
nightmare for Multi-national companies and Big tech ?
In May of this year, the US suggested an International minimum corporate tax of 15% on large multinational companies with the aim of increasing revenues from corporations that operate across borders.Big tech companies like Facebook, Google, Apple are the focus of this new tax since they are able to avoid taxes by moving their headquarters to tax havens.
How will the Minimum tax be applied?
The minimum corporate tax does not require countries to set their rates at the agreed floor but gives other countries the right to apply a top-up levy to the minimum on companies' income coming from a country that has a lower rate.
The proposal is that the new tax would be based on sales in each country, to the global profits of large multi-national companies regardless of their physical presence in a given country.
Are countries onboard?
Last week, the US Treasury Secretary announced that 130 countries including China and India had agreed to the 15% global minimum corporate tax set to take effect in 2023. The 130 countries that agreed to the new tax represent more than 90% of the global GDP.
COVID-19
Kenya’s Plan of a Mass Covid -19 Vaccination Campaign
Last week, President Uhuru Kenyatta unveiled a vaccination plan for Kenyan citizens with the final goal of vaccinating the adult population (26 million) by 2022. Details of the plan are:
Kenya has struck a deal to get 13 million shots from J&J for the price of 10 million doses.
it is expected that 150,000 doses of the J&J vaccine will administered daily from August this year.
The World Bank has approved $130 million of additional funds to help Kenya buy more vaccines to tackle the pandemic.
ELECTRICITY
Why Kenyan Consumers will pay more in power bills
The Energy and Petroleum Regulatory Agency last week raised the fuel energy charge by 24% (ksh 3.63) for each Kilo-watt hour of electricity that Kenyan consumers will buy in July.
The implication of this
A small household using 200 units a month will pay Ksh 3,756 for electricity, an increase of ksh 160 from the previous month.
Businesses and Companies, who typically consume more electricity, will suffer more burden. A small business that uses 1000 units in a month will pay Ksh 800 more than it did in the previous year.
PARLIAMENT
Sleeping on the job? Kenyan Legislators who did not speak in parliament the whole of Last year
Perhaps a rather embarrassing list to feature on, Mzalendo Trust revealed in their report named “2020 Parliamentary Scorecard” a list of parliamentarians who did not speak in parliament the whole of last year.
Below are the highlights:
The number of silent MPs in 2020 rose by 10 in the National Assembly and by 2 in the Senate.
In the Senate : Baringo Senator Gideon Moi, Philip Mpaayei (Kajiado) and nominated senator Victor Prengei made zero contributions
In the National Assembly, silent members included; Jane Chebaibai (Elgeyo Marakwet), Jane Njiru (Embu), Anab Gure (Garissa), Irene Kasalu (Kitui), Rose Mumo (Makueni), Amina Gedow (Mandera), Asha Mohammed (Mombasa), Lilian Tomitom (West Pokot), Janet Teyiaa (Kajiado), Ernest Kivai (Vihiga), Alfred Sambu (Webuye East), Imran Okoth (Kibra), George Kariuki (Ndia), Joshua Aduma Owuor (Nyakach), Sylvanus Osoro (South Mugirango), Lokiru Ali Mohamed (Turkana East), Oscar Sudi (Kapseret), Gideon Konchella (Kilgoris), Fred Ouda (Kisumu Central), Richard Onyonka (Kitutu Chache South), Mathias Robi (Kuria West), Marwa Kitayama (Kuria East), Bady Twalib (Jomvu), George Aladwa (Makadara), Abdi Shurie (Mbalambala), Maalim Kulow (Banissa), Patrick Ntwiga Chuka/Igambang’ombe), Said Haribae (Galole), Charles Gimose (Hamisi) and Maina Kamanda (Nominated).
Other ConversationStarters
A bill in parliament (The Lifestyle Audit Bill) seeks to remove restrictions on ordinary Kenyans seeking to access information on income, assets and liabilities of persons holding public offices. This is among the efforts to fight corruption in the country.
The increase in excise duty from 15% to 20% on airtime means that call rates have increased. The Safaricom and Airtel call rates are now at Ksh 2.78 per minute.😯
KCB Group informed their customers via text messages that loans advanced through the KCB M-Pesa will now attract a fee of 8.64%, up from 7.35% due to the approval of the re-introduction 20% tax on all fees and commissions earned on loans.
NCBA bank also informed customers that all loan-related fees and commissions will be subjected to the 20 percent excise tax
The amendment to the Retirement Benefits act gives the Kenya Revenue authority power to attach bank accounts of employers who fail to remit workers' contributions to pension schemes. This means that an employer who fails to remit contributions to their employee’s pension scheme will personally bear the cost.
Last week, the High Court issued interim orders baring CMA and the Directorate of Criminal Investigations (DCI) from probing or suing Cytonn Investments over the Cytonn High Yield Solution and Cytonn Project Notes pending the hearing and determination of an ongoing case.
The Management of Cytonn Investment PLC has sued the Capital Markets Authority (CMA) over criminal proceedings triggered by the CMA as a result of complaints by investors who have been forced to extend a moratorium on payments from the funds or alternatively take up a debt to real estate conversion.
Land prices in Kilifi have increased by 50 percent driven by the construction of residential and commercial projects by real estate firms in the area