Good Morning,
South Africa discovers Covid-19 variant
Scientists from South Africa discovered a new covid-19 variant, Omicron, with mutations that one scientist described as a “big jump in evolution”. The World Health Organization stated that the variant had a large number of mutations, and that early evidence suggested an increased reinfection risk.
Various countries (Britain, United States, Italy, France, Israel and Singapore) rushed to impose travel restrictions banning flights to and from South Africa, Botswana, Eswatini, Lesotho, Namibia and Zimbabwe.
Kenya has not banned travel to southern Africa but the Ministry of Health says it will carefully screen people arriving from South Africa, Botswana, and Hong Kong for the new COVID variant.
New cases of the Omicron coronavirus variant were detected all around the world on Sunday -
Financial Times
Banks with Hidden Mortgage Charges
Earlier in the year, the Competition Authority of Kenya highlighted 12 banks with hidden mortgage charges after it conducted a review of home loan contracts provided by 27 banks in Kenya.
Among the 12 banks were : KCB bank , NCBA bank, ABSA, DIB bank, Mayfair Bank, Consolidated bank, Victoria Commercial bank & Bank of Baroda
The review highlighted that the said banks provided customers with incomplete and unclear information of all the charges and fees payable on loans.
Looking forward - 11 of the banks have reviewed the terms and conditions of their home loan contracts while one asked for more time to comply.
CAPITAL MARKETS
1. National Bank of Kenya delisted from the stock exchange
On 25 November, The NSE (Nairobi Stock Exchange) issued a notice delisting the National bank of Kenya. This follows the takeover of 100% of its shareholding by KCB Group.
NSE had suspended shares of National Bank of Kenya since October 2019.
2. Safaricom’s share price falls by 18.3%
Safaricom has lost Ksh 332.5 billion in three months as a result of its share price falling from Ksh 45.25 to Ksh36.95 (numbers as per Wednesday last week). The Telco’s market capitalisation now stands at Ksh 1.48 Trillion.
The share price has been falling due to uncertainty over whether Safaricom’s investment in Ethiopia will break even in the projected period.
The Telco has invested heavily in Ethiopia and is a major shareholder with a 55.7% stake in the Ethiopia venture.
3. Companies making losses Prevented from Share buybacks
The Guidelines on Buybacks for Listed Companies Barrs listed firms with negative equity from rolling out share buybacks.
What does this mean:
a. Companies intending to repurchase stock from the market should ensure their assets are equal to or exceed the liabilities of the listed company.
b. Companies shall rely on the last audited financial statements in determining the solvency status and ensure the numbers are reliable on the date they inform shareholders of the proposed share buyback.
c. A listed company should demonstrate the ability “
to pay its debts as they come due in the ordinary course of business for a period of 12 months”
before it is cleared to buy back shares.
EDUCATION
Proposed Funding formula for Public Universities
The University funding board has proposed a performance based funding formula for Public universities. Based on this formula, the universities whose graduates fail to secure jobs within a year face reduced cash from the State.
The present funding formula is based on the number of students and the cost of courses at the universities.
why a new funding formula? - The government has come under increased pressure from the world bank to restructure public corporations making losses in order to cut spending. Restructuring includes the possible mergers or closure of public universities.
The proposed formula is based on performance indicators such as; a.) four-year graduation rate; b)graduate employability rate (one year after graduation) and c) research inputs.
M-PESA
Advertisements on the M-pesa App?
disclaimer, the balance above does not reflect my actual balance.
The M-pesa app might soon have an advertisement feature for businesses as Safaricom plans to upgrade the app to enable it offer advertising services for businesses.
Background: Safaricom’s parent company, Vodacom group, signed an agreement with China’s Ant group to allow Vodacom implement the Alipay app in South Africa and have some of its features built into the M-pesa platform.
The advertising feature will be similar to that of Amazon and and Ali pay.
The advertising feature will first be introduced in Kenya and Tanzania.
KenyaAirways clashes with the pilot union
Kenya Airways faced serious backlash from The Kenya Airline Pilots Association (KALPA) after it directed its pilots to fly faster on the Nairobi-Guangzhou route and halved the number of pilots on every trip from 4 to 2.
Kenya Airways’ justification
The airline claimed that the directions issued are lawful because the Civil Aviation act allows duty time of up to 15 hours on international flights when 2 pilots are in the aircraft.
With increased speed on the China route, the flight time would be reduced to 12 hours hence having only 2 pilots onboard remains lawful.
The airline also stated that its flights to London and Amsterdam which have a maximum duty time of 12 hours have one captain and one first officer, similar to the proposed changes on the China route
Kenya Airline Pilots Association’s argument
The new rules by Kenya Airways is proof that the airline is prioritising commercial interest over persons’ safety.
Directing pilots to cruise at a cost index of 300 on the route is illegal and it risks the lives of passengers and crew.
Reducing the number of pilots in a single flight from four to two in an effort to save on allowances and hotel costs will lead to fatigue on long routes and is against the standard practice.
looking forward: The union called upon the Kenya Civil Aviation Authority and to investigate the actions of Kenya Airways director of operations.
REGIONAL
Foreigners urged to leave Ethiopia
The US, Germany, France and UK have urged their citizens to leave Ethiopia as fighting between federal forces and rebel groups moves closer to the capital, Addis Ababa.
The U.N. also announced evacuation flights for family members of its staff in the country.
Last week, The United States issued a Notice to airmen (NOTAM) warning pilots that planes operating from Ethiopia could be directly or indirectly exposed to ground weapons fire or surface to air fire as the clashes between Ethiopian forces and Tigray fighters intensify.
COMPANIES
2000 companies closed in year ended July
More than 2,000 companies were closed down by the Attorney-General for failing to disclose their owners.
Background:
In October last year, public and private companies received an order from the AG to provide personal information of shareholders who own more than 10 percent or exercise control in a firm, failure to which they would be charged a Sh500,000 fine for the company and each defaulting official.
What amounts to personal information? the names of shareholders (including secret shareholders), their phone numbers, residential addresses, national ID/passport copies, occupation, the date they became and cease to become owners.
The rule was put in place to curb money laundering, financing of terrorism, unmask illicit wealth and provide information to Kenya Revenue Authority.
2,540 entities failed to comply with this policy and hence struck off the register in 2020
MUST KNOW
Democratic Republic of Congo’s approval by Council Ministers to Join the East African Community - The East African Community council of ministers officially approved the entry of DRC into the East African Community (EAC).
The East Africa Community heads of state will make the final decision of whether The DRC joins the EAC as the 7th member.
Nairobi National park celebrates 75 years anniversary - As part of the celebrations, the elderly and People living with disabilities will have Free entry to National Parks for 30 days
The Nairobi National Park will allow the elderly above 75 years free entry for 30 days.
People living with disabilities will also be allowed free visits to the Nairobi Animal Orphanage and Safari Walk, which are part of the park, until Christmas Day.
There will also be free entry for the first 75 visitors on December 16.
SASRA (Sacco Societies Regulatory Authority )signs Memorandum Of Understanding with DCI (Directorate of Criminal Investigations) - The Memorandum of Understanding formalized the establishment of the Sacco Societies Fraud Investigation Unit (SSFIU).
The unit which comprises of officers from the DCI will investigate officials who steal funds from SACCO’S.
In the year to March 2021, SACCO’s in Kenya lost ksh 106 million to fraud and cyber theft.
Treasury to raise Kshs 40 billion in December bond sale - The Bond sale will consist of reopened 10 and 20 year papers first sold in 2019 and 2018 and will offer coupons of 12.28% and 13.2% respectively.