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2 items tagged "SWAG"

• July 02, 2009
• 2:30

  No SWAG from Safaricom

   » ‎ bankelele

  Tags:  SWAG  

  There will be no SWAG from Safaricom at their annual general meeting that will be held on August 19 - so the company boldly proclaimed in a media briefing on Wednesday.
  
  Even while projecting that just 30,000 of their 830,000 shareholders to turn up, the company budgeted a total Kshs. 352 million (~$4.5 million for the event) which they cite as being too expensive. They even have compared the cost of the day’s events to be the equivalent to one month of all their leases, of 1 ½ months worth of administrative expenses – all channeled to a one day event!
  
  
  
  Yet two things are clear:
  
  1. Much of the burden is regulatory: They estimate it will cost Kshs. 240 million to print and circulate an annual report (Co-Op Bank, the most recent listed company has a 150 page report). Dividend will be distributed to shareholders, and they estimate that it would Kshs. 73 million to send these by EFT to a fraction of investors. Truth is most dividends and paid by cheque, very few by EFT.
  
  2. SWAG generosity is not that expensive (but these are tough times): Kshs. 40 million for shirts, lunch, caps, and umbrellas is not much money for the company to spend, even if they don't provide transport to the venue (about 10 kilometers from town) . However these are cost-cutting times even at the largest companies. A few years ago, Nation Media Group (NMG) would hire buses to take their shareholders to their Nation AGM at their premises (beyond Jomo Kenyatta Airport) where they’d would have lunch and get some SWAG items. This year's event was at KICC in the middle of town (no transport costs) and shareholders only got copies of newspapers with their buffet lunch.
  
  For Safaricom to take a harsh stance on SWAG is rather cold unless the directors and manager also adopt a similarly Spartan lifestyle e.g. no water for directors at the meeting and no breakfast /giveaways for media and institutional investors when they announce quarterly results. Still I expect a few thousand shareholders to turn up, not believing that there will be no SWAG
  
  Hi Tech Cost Cutting: Safaricom is combating the high cost of annual general meetings and investor relations through technology
  
  1. Annual reports will be downloaded from their website, which is probably the best in Kenya among NSE listed firms in terms of communicating with shareholders. It is updated constantly, even on the same day with CEO briefs to media and institutional investors.
  
  2. Use M-Pesa to pay dividend. Odds are that most of their local 830,000 shareholders are also their (13 million +) customers; many will not have bought shares since the IPO – meaning their dividend cheques are perhaps just 20 shillings $0.25), so by employing M-pesa this will be a much cheaper channel than cutting and posting cheques for such small amounts.
  
  The logistics of doing this are quire significant, it will involve partnering with the company registrar, perhaps the central depository settlement corporation (CDSC), and M-Pesa agents, to ensure each person gets their 10% dividend payment in the correct formula (a reversal will be a nightmare). Once this is done it will be an eye-opener for some of the other companies with large shareholder bases +50,000 including Kengen, KCB , Kenya Re , Mumias , Co-operative Bank and Kenya Airways who had a their loss-making year in a decade.
  
  Other Development: The media release media release (PDF) also mentioned two recent developments at Safaricom:
  
  1. Investor road show where they visited institutional and fund investors and talked in detail about the company in London (T Rowe Price, Genesis Investment, Charlemagne Capital, Marshall Wace, Renaissance Investment, Eton Park Capital, JP Morgan Chase, Aberdeen Asset, Henderson Global , ROBECO Group, Cyrte ), New York (EMS Capital, DWS Scudder, Morgan Stanley, Galleon Partners, McKinley Capital, Harding Loevner, Goodman), Boston (State Street, Wellington, Fortis ), Johannesburg (Stanlib, RMB, Visio) and Cape Town (Investec, Allan Gray , Coronation, Fairtree)
  
  2. Their investment with Jamii Telecom which will include partnering in use of fibre in metro areas , and resale of excess capacity on TEAMS and Seacom, among others.
  
  Read also ratio magazine Dont Come to Safaricom for Lunch post
• May 29, 2009
• 8:16

  SWAG Like Us

   » ‎ bankelele

  Tags:  SWAG  

  Thursday and Friday have seen a series of company annual general meetings (AGM's) for their shareholders. Thursday had Standard Chartered, and Nation media group, while Friday had Co-operative Bank, Diamond Trust, CFC Bank, and Scangroup.
  
  With over 50 listed companies, why some days become so popular is a mystery; calendars can be spread out by the capital markets authority. It has been difficult for media and investors to keep up with this; media houses will perhaps give coverage to only one event (e.g. Nation mainly featured their own AGM), while a common lament of shareholders has been there are 365 days a year, how do these companies all pick on one day to have five different meetings?
  
  Investors want SWAG: An excellent series of (3) articles on investor relations (IR) management in East Africa notes that retail investors are often there (at AGM’s) for the free lunch, not for company information.
  
  And how do investors deal with the challenges posed these last two days?
  - try and attend every AGM
  - Dashing back and forth to attend all, spend as much time as it takes to get SWAG
  - Send a friend or relative as a proxy to get SWAG while they do the same at another meeting
  
  What is SWAG? The urban dictionary gives the best definition of SWAG which can be
  
  promotional merchandise for a band, record label, or other entity in the music business, usually distributed at concerts. May include t-shirts, stickers, promo CDs, posters, etc. Often free, but not necessarily; a t-shirt or record purchased at a concert might still be considered swag, especially if it is a design or release that is not readily available in the mass market. The chief difference between swag and regular merchandise is that its purpose is not to make a profit, but to promote the band/label, and reward its supporters by giving them something cool and unique
  
  Or
  Stuff/Sh*t We All Get - Relating to the trade show convention industry, where exhibitors hand out "free stuff" to visitors. Most of the time these items are purely promotional materials, and are fairly worthless. i.e. pencils, mugs, and mouse pads. SWAG always has the company name, logo, slogan, product, service, and contact information clearly printed somewhere on the item/s
  
  So SWAG is why many investors attend corporate annual general meetings. Don't believe that institutional investors and media attendees are immune to the lure of SWAG - they also get their own SWAG, often the same stuff (meals & promotional items) but at different more respectable venues.
  
  Why SWAG?: Companies should not lament SWAG as being expensive items that are the price of being a listed company that has to satisfy hungry shareholders. A shareholder has to show up (or send a proxy a.k.a authorized representative) to get some SWAG.
  
  Attendees have to show up to get SWAG, those who are not in attendance or represented don't get any except the dividend which all shareholders get, but according to the number of shares they own. For many shareholders, their SWAG is much more than the dividend that their shareholding entitles them to
  
  For the guest It is also a universally African concept to honour your guests with a meal.
  For the host And for the company giving out SWAG this can be vital to the orderly and delicate flow of a company’s annual general meeting. Also, in marketing terms, a well designed, durable and branded cap, travel bag, t-shirt or umbrella, will be used to market the company for years to come in faraway parts of the country where even the company’s products are not sold, and long after the shareholder has sold their shares.
  
  SWAG Costs: While the costs of SWAG items (from vendors like Vajas and San Valencia) has not increased by much, the number of shareholders seeking SWAG appears to have gone up significantly in these tough economic times. many show up for SWAG and don’t even enter the meeting hall and some companies acknowledge this by handing out SWAG before the meeting starts. And therefore the cost of hosting an annual general; meeting has gone up Safariom with 800,000 shareholders is probably contemplating the SWAG question for its annual general meeting set for august 19.
  
  How can they minimize the cost of SWAG?
  - have a meeting at a remote venue and hope few show up for it
  - publicly announce that they are not going to be giving out any SWAG. But tough to do when well paid directors and executives are announcing billions in profits
  - be stingy with the SWAG (Yesterday, the Nation Media Group gave out copies of their newspapers (Daily Nation, Taifa Leo, Business Daily and East African) along with a buffet lunch, while a few years ago they gave out gym bags & polo shirts with lunch and transport to the venue)
  
  What's your opinion of SWAG?