Opinions expressed below are those of the person and do not constitute the offer to buy or sell investments through the named companies. Information on the performance on any brokerage firm in the country is unavailable and there is no supervision, due diligence or research report that is publicly available on the mode of operation or conduct of the member firms of the Nairobi Stock Exchange (NSE). Most investor decisions are made based on non factual conduct and mostly public perception of stock broking firms. Our report is based on these sentiments which have come to define the general mood and feel of the market. {For more clear cut analysis and information check
www.emergingafricacapital.com &
www.smartbizafrica.com }
Suntra Investment Bank
Suntra is believed to be among the largest players in the Kenyan capital market. It doubles up as both a stock broking firm and an investment bank. It boasts of being the largest in dealing for fixed income securities. On stocks, they have an average rating from the retail investors most of who find them too large for them.
It would be a good recommendation for a corporate institution that wants to do a placement in the local market (whether public or private).
African Alliance
African Alliance, just like Suntra Investment Bank doubles up as both a stock broking firm and an Investment Bank. They have operations in both Kenya and Uganda but that besides; they can hardly place any good deals across the border in good time- back office woes.
However, they have been very popular to the high end investors. They have a minimum deposit which stands at Ksh. 250,000 or USD. 3,700. Their other major clients are mainly institutional.
They will probably outsmart any company's research department as far as regional company analysis is concerned. Their research reports on companies have been accurate and have shaped market direction on many occasions. A keen observer would remember them negatively for having once changed their recommendation on Uchumi Supermarkets Ltd from a buy to sell not long before the company closed its doors.
One would consider them if investing from outside the country but not the ordinary speculator- long term, serious investor.
Ashbhu Securities Ltd
Not popular but has a good retail outfit. Investors claim that the company changed a lot the last half of 2006 and must have undergone a management change. The small starter, this could be a good place for you.
CFC Financial Services Ltd
CFC is perhaps the corporate entity in the stock broking world that fits on both extremes. They have a good name both for the corporate and retail investors. They understand the rules and that gives a limitation to the day trader/speculator. Chances are, if you want to sell, you must present yourself and sign proper documents- no shortcuts.
Good for the long term investor and people who understand the market but want first class professional service.
Dyer & Blair
This is the most talked about Investment Bank/Stockbroker. They have a good name in as far as underwriting of large entities especially the pre-government entities.
Bloggers in the past have had debates that have had long strings of clients complaining about their slow service. They could do well if they packaged themselves entirely as a Corporate Finance Entity for the corporate.
Francis Drummond
Not very popular and hardly get anyone in the streets who invests through Francis Drummond.
A report carried in a blog late last year had it that they have a feed to the UK markets. That makes a good firm for the local investors interested in the European Market. However, at a time when African Markets are yielding returns that far outweigh those of the first class economies, is there need to think far West?
Kestrel Capital (East Africa)
Kestrel mainly serves corporate and the high net worth individuals. Their research reports are also well presented and at most times, give a true picture of the market direction.
They represent a large number of investors who are based outside the country. They have however not done much in the corporate finance scene.
Ngenye Kariuki & Associates
Ngenye Kariuki is a retail stock broking firm that has positioned itself well across the country through stock agents and branches. As far as the 'everyone can buy shares' mentality runs in the market, they would fall second after Nyaga Stockbrokers.
Their back office research has nothing to show. This makes them a recommendation only for the retail investor who operates his/her account through an agent.
Sterling Securities limited
A client remarks, 'they are not the same anymore'. Sterling has had a good name in as far as execution of deals at the NSE is concerned. They have for the better part of last year and past two years grown to encompass a large retail and corporate client base. With the numbers increasing so fast however, focus seems to be slowly changing to a corporate structure. The company has a good front office and accessible research material from the research department.
Apex Africa Investment Bank.
Stereotype never parts its way from the corporate scene. Apex Africa Investment Bank has an Asian outfit. They can be defined as 'trying' due to their efforts to enter the corporate finance market. Can be a good try for the corporate investor who is ready to grow with the companies that are trying to position themeselves in the region.
Faida Securities
A retail investment house with huge deals and nothing for the small investor. If one can stand the queues, this will work. If not, you've got to know someone at back office.
Bob Mathews
Very new firm that is almost positioning itself in online trading- however, very slow. They just received their license but telling from their office, a lot is desired considering that this is a market with little competition.
Standard Investment Bank
This is perhaps the most popular retail entity in portfolio management. Their managed portfolio accounts have been quite popular since 2004. However, this has created a niche leaving normal operations of the firm a bit undesirable. Being an investment bank has not won the firm many deals. Would highly recommend their portfolio accounts but don’t expect rocket science or black magic.
Solid Investments
Poor office set up, disorganized front office and unmotivated staff. Not your typical stockbroker. Their agents have better offices. Management also slow and evasive.
Reliable Securities
Good retail broker with a conservative market approach. Never get to hear about them unless you know their dealer
Discount Securities
Average retail broker with a very conservative market approach.
Rennaisance Capital
Yet to start its operations but positioning itself properly in IT prior to their official launch. Would be interesting to see how they organize their client management- both front office, research and back office operations.
Comment on Francis Thuo and Partners and Shah Munge and Partners
Francis Thuo and Partners was suspended from the Nairobi Stock Exchange following mismanagement woes and loss of clients funds. The CEO and founder, Francis Thuo, the Managing Director had just passed on a few months before the Stockbrokerage firm was declared insolvent. It was the oldest stockbrokerage firm in the region.
Shah Munge was the largest and the best stock broking firms in the 1990’s. That was until they were charged with corrupt practices and involvement in financial crimes. The firm was suspended and to date, the suspension has not been lifted.
Nyaga Stockbrockers, who have also been accused of malpractice including trading in clients shares, have a policy of high secrecy. They even don’t have a website and thus every hard to gather info on them.
The Market as It is today
Brokers have tried to flex their muscles to win corporate deals in a very non-competitive market. New entrants include Sterling Securities and Bob Mathews Stockbrokers.
The biggest players in terms of underwriting deals include Dyer and Blair Investment Bank, Standard Investment Bank and Suntra Investment Bank. Corporate deals at the local market are also dominated by the same companies and in addition Kestrel Capital and African Alliance which have positioned themselves as a corporate stockbrokers.
Charges
All brokers charge a standard fee which is regulated by the Capital Markets Authority and the Nairobi Stock Exchange. The fee is based on a base rate of 2.101% for a single transaction of below Kshs. 100,000 and 1.8101% for a single transaction of below Kshs.100,000. Out of this, only 1.5% is brokerage commission while the balance is apportioned to CMA, NSE, Stamp duty (KRA). Sometimes, brokers give a rebate out of their 1.5% slice on high net worth investors.
{For a Comprehensive report on Kenya's Financial Service Providers, write to
editor@smartbizafrica.com}
Reblogged from
Emerging Africa Capital.
KA-INVESTOR
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