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15 items tagged "living"
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Urban Inflation Index September 2009
» bankelele Urban Inflation Index September 2009 -
KPLC Kenya Power Rationing: Winners & Losers
» bankelele KPLC Kenya Power Rationing: Winners & Losers -
Real Estate Moment
» bankelele a series of real estate pieces
Real Estate Paradox: was with a real estate developer who’s looking to set up even more projects over the weekend; he talked about a paradox where real estate rental prices are dropping, while house prices continue to rise. Note: I’ve not seen signs of rental drops, but this probably applies to the developer’s current financial outlook when choosing to build for sale or to rent in Nairobi today
NSSF the Kenya National Social Security Fund NSSF continued a trend started last year of publishing their financial accounts. For the year to June 30 2008, they had of total assets of Kshs. 87.53 billion (~$1.1 billion), partially comprising 49% equity investments (43.7 billion), treasury bills & bonds (11.2 billion), and land & building 24% (20.97 billion) which was down from 29% the year before.
While NSSF’s investment income of Kshs. 5 billion was a 25% increase from the year before, poor returns in local shares at the Nairobi stock exchange have hit pension, fund, and insurance schemes leading them to seek greater returns and safety by investing in real estate. Yet the NSSF, because of its past association when it was a political cash cow and got saddled with unpalatable properties, is going against the popular grain, but has no choice even as it faces as long struggle to be viable safety net for retired workers.
Water shortage: dry water pipes in some Nairobi estates have been a pain to residents in some parts of town who have to buy water from vendors. Many construction sites even have to ferry in all the water they need by lorry seems to be a good business idea to have a water lorry now
Bricks & Banks: The new Equity Bank headquarters are now up in Upper Hill and UAP Insurance will soon be putting up a building in the area. On the Westland’s side its Southern Credit Bank and Standard Chartered Africa with new buildings about to be completed.
Cement & inflation: I’ve added retail cement prices to the inflation index starting with a 50 kilo bag of bamburi cement at 780 shillings (~$10).
S&L Gone: Savings & Loan is no more after KCB shareholders absorbed the subsidiary within the group structure as a cost saving measure. There was a nice (offline) article by Carol Musyoka in the Business Daily and she highlighted that S&L’s rapid growth was funded, not by deposits, but by funds drawn from parent KCB and wondered what return this was to KCB shareholders
Goodwill barrier: goodwill is a fee demanded by business owners from business tenants, shop owners etc. It’s a strange phenomenon; the fee, often as much a year’s rent, is paid before the building is even put up for the shop-tenant to secure space in the building. Another fee is paid each time a shop moves in or out of the building. This exorbitant business expense has put off many start ups and small business owners from renting or setting up shop in downtown Nairobi.
More articles on the goodwill phenomenon from Ghana, a Kenya forum and the Standard -
Kutwa Tuesday: From Stanchart to LPG
» bankelele stories found this week
Stanchart Bank:
Smaller profit - Standard Chartered is being much maligned for being the first bank to report a profit drop in 2008 of 4% to 4.7 billion shillings. ($59 million) (Increased 29% in 07). The bank which adopted a conservative approach compared to Barclays, KCB and Equity. Stanchart had asset growth of 9% to 99 billion (13% in 07), deposits up 4% to 77 billion and loans up 10% to 43 billion in 2008. Still their shareholders will get the highest dividend of any listed bank in 2008.
Here are some other performance comparisons of the main banks that have so far reported their 2008 results.
Goes for smaller customers - In a slight about turn, Stanchart has also launched a new low cost transactional account called Hifadhi, costs 2,000 to open, no ledger fees, or ‘cash handling fees’ with e-statements you only pay for transactions you incur, though its’ not as affordable as other 'cheap' bank accounts for small earners. Going for smaller customer has been a recurrent theme in 2008 with banks, insurance and investment companies lowering the minimum subscription amount. Examples are pepea from Barclays, Toboa from Old Mutual and even the Government of Kenya which lowered the minimum investment for GoK treasury bonds to just Kshs. 50,000 (~$625)
Bank briefs
- Stanchart get back to what they are good at – big corporate deals this one for Kengen
- Gulf African launches a shariah compliant mortgage scheme
- New bank branches: First Community bank now in Malindi, Ecobank in Kisii, while Family Bank re-opened in Githurai
- Another SMS sends Equity customers into bank panic withdrawals this time in Machakos.
From the blogs
Siasa mbaya, maisha mbaya: Global economic slump aside, Nairobi’s Stock Exchange will not see a bull run until the country’s political problems are sorted out according to MainaT
The Sunday Nation broke a story of the old Embakasi airport been handed over to an unlicensed new airline, but airport analysis comes from one Coldtusker
Following in the success of the infrastructure bond (over-subscribed by 45%), the Kenya Government is offering another bond to supplement its budget deficit; this one is for 8.5 billion ($106 million). More details from Conceptadvisoryservices and the minimum investment is just 50,000 ($625).
Kenya Rugby Effects: Kenya had a wonderful run at the IRB World Cup in Dubai, and knocked out defending champions Fiji in the quarter finals. Here’s some rugby loss reactionfrom Fiji.
Elsewhere
Employees lose & lose - it’s been a bad week for employees as the Employment Act was set aside and the government shifted more of the pension burden to civil servants to contribute towards their own retirement funds.
Madaraka finalized - Madaraka Estate houses were finally sold, apparently ending a long long running saga between homeowners, the City Council and the National Housing Corporation who should really update their website.
Laptop mania - so many offers for laptops these days, new this week were
- Safaricom selling Macbook with broadband modem for 100,000 ($1,250)
- Acer A110 laptop on sale with open office for $230 - great for Kenyans new to mini laptop market
- Even my bank/broker (CFC) hawks Acer Aspire 4710 and has loans that work out to 5,500 ($70) per month
Is Grad School a Con? - Half the Sunday Nation advertisements were for colleges aiming at the recent high school graduates whose results were announced last week. Also growing are the numbers of universities and master programs, but this article argues against going to grad school to avoid the recession with the author pointing out that;
- Grad school pointlessly delays adulthood.
- PhD programs are pyramid schemes
- Business school is not going to help 90% of the people who go.
- Most jobs are better than they seem: You can learn from any job.
- Graduate school forces you to overinvest: It’s too high risk.
(found at chris blattman)
LPG Shocker - when to buy cooking gas last night. Found the cylinder, however it appears that there is now a valve that will be mandatory on all cylinders from April 2009 - it is a universal valve, that will enable consumers to buy LPG /cooking gas from any supplier e.g. Kenol., Total, NOCK - replacing cylinders from any of them, since they will now have a common head/valve. The move is supposed to break the monopoly of established companies e.g. if you had a Kenol gas cylinder, you could only replace it at Kenol when buying new gas, whereas if you wanted to switch to Shell gas, you’d have to buy a brand new cylinder.
new gas cap
The problem was that many Total stations did not have the valve. (I checked at three stations) and they all sent me to the place that has everything in Kenya - Nakumatt. Nakumatt also say they stock valves for all companies, but only had the generic caps to sell. It’s scary to use a generic caps, since there are many fires in Kenya caused by exploding/leaking cooking gas cylinders. Hope this turns out ok when April comes around and more consumers realize they have to buy caps which cost anywhere from 500 ($6.25) to 900 shillings each, another cost to the burdened urban consumer. It would also be nice if oil companies and/or the Government conducted some consumer awareness about this matter, not leaving it to Nakumatt and untrained Petrol attendants. -
Urban Inflation Index: March 2009
» bankelele Changes in the three months ago since my last review in December 2008 and also compared to February 2008, which was just over a year ago.
In 2009, oil prices and maize prices have become the national talk as scandals, shortages, and price hikes have plague these industries causing grave concern that the country could be destabilized.
With maize, a shortage of maize flour on supermarkets coupled with shady deals were highlighted in the media all leading to a motion of no confidence in Parliament against the Agriculture Minister in February 2009. it was shot down
In oil/petrol, the collapse of Triton petrol, a small politically-connected oil marketer had ripples across the industry. The firm appears to have made a big gamble and purchased and stored excessive stocks in the expectation that oil prices would remain high, but when they dropped, the firm imploded and the chief executive fled to India. It has become a monster scandal with staff losing their jobs, banks suing the government (through the oil storage and pipeline companies) and calls for another no confidence vote in Parliament, this time against the Energy Minister.
changes in the last three months
Gotten cheaper
Fuel: A Litre of petrol fuel (at local petrol station) is now Kshs. 75 (~$4.2 per gallon) which is about 20% cheaper than it was 92.7 in December 2008. Shell Petroleum led the price drop, forcing other oil marketers to follow suit and probably did in Triton with their price cut in December 2008. Petrol was Kshs. 88 a year ago
Unchanged
Staple Food: Maize flour which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2 kg. Unga pack at Uchumi today costs Kshs. 96, compared to Kshs. 97 in December 2008. However it cost just Kshs. 52 a year ago
Communications: Despite the presence of two additional phone companies, the mobile price war has cooled and calls cost about Kshs. 8 (~$0.10) per minute. With Zain, the price applies across all networks, but for Safaricom it's within their network only. New companies are offering gimmicks like Yu's Kshs. 0.50 per minute (after making calls for two minuets at Kshs.7.50). However other prices, notably in data and equipment (handset prices) have dropped. Safaricom modem’s cost less than ½ their introduction price, and features like Picture messaging (SMS) now costs Kshs 3.50 ($0.04) (it was introduced at 20) a year ago Safaricom calls were also about 8 shillings per minute
More Expensive
Electricity: my bill last month is Kshs 1,800 - slightly less than the bill a year ago. However by looking at the components that make up the bill - fixed charge is Kshs. 240 (was 175 a year ago), fuel cost adjustment is 427c per kwh (was 199c a year ago), forex adjustment was 63c per kwh (was 31c per kwh) - all causing my bill to cost about 70% higher than my approximate consumption a year ago. This is also a sore point with Kenyan manufacturers and industries who have complained (PDF) about the high tariffs even as Kenya power & lighting company announced improved profits for 2008.
Foreign Exchange: 1 US$ equals Kshs. 80.07, it was 79.08 in December 2008. Remittances to Kenya which have dropped every month since October 2008, are partly to blame. US$1 was 70.7 shillings a year ago
Entertainment: A bottle of Tusker beer (at local pub) is Kshs. 130 ($1.60) up from Kshs. 120 in December 2008. East African Breweries, Kenya's leading brewer, has complained about high input costs and new taxation, and for once their share price is almost as cheap as the recommended retail price of their main seller - a bottle of Tusker beer was 120 a year ago
Other food item: Sugar (2 kg. Mumias pack) is at 165, it was Kshs. 160 last December. 150 a year ago
EDIT: Also, more expensive is Housing - the rent was hiked 40% in January 2009; however that’s still about ½ what I’d be comfortable paying for a mortgage in the neighborhood. -
Urban Inflation Index: December 2008
» bankelele Four months ago last review (should be a quarterly exercise going forward) . 2008 has been a year with high prices and cost of living factors in the news. From the post-election violence in January to the (then) world oil prices, the pinch has been felt in Kenya.
The Government has come under pressure, but without addressing of its own excesses (procurement, new offices & limousines, parliemantarians, councilors and judges who refuse to pay income tax), has likewise tried to run the screw on the corporate sector - resulting in efforts to reduce the price of petrol and now maize flour (staple food)
Gotten more expensive
Staple food: Maize flour which is used to make Ugali, that is eaten by a majority of Kenyans daily. A 2 kg. Unga pack at Uchumi today costs Kshs. 97 which is 1/3 more than the Kshs. 73 four months ago. Farming woes continue, the crop this year is bad and Unga who said that they ran out of flour, among other revelations at their AGM, also stated that the maize harvest in 2009 will be worse and high prices will continue. There have been allegations of dodgy imports and the Government is today trying to arm-twist the price of Unga down to Kshs. 55 (EDIT – the Government announced today that maize will cost Kshs. 72 in urban areas and Kshs. 52 in rural areas)
Other food item: Sugar (2 kg. Mumias pack) is at Kshs. 160, up from Kshs. 145 three months ago. For Mumias customers and shareholders, the price is even lower for other unbranded sugar(s) on shelves.
Foreign Exchange: 1 US$ equals Kshs. 79.08, (18% weaker) than the Kshs. 67.4 four months go. This is partly the strengthening of the dollar, partly outflows from Kenya (at the NSE) - and comes after the shilling (while strong) had cushioned some impact of high oil prices.
Gotten cheaper
Fuel: Litre of petrol fuel (at local petrol station) is now Kshs. 92.7 (~$5.40 gallon) which is about 10% cheaper than the Kshs. 101.50 seen last time. While that is still higher than it was at the beginning of the year, and oil prices are down over 60% from the record highs of mid-2008, it is remarkable that for once fuel prices have reduced. In the past they have merely stagnated and oil companies, not passed on savings to consumers, but the threat of the government to regulate the prices, and a sustained media campaign (web/radio) has resulted in a slight reduction in petrol prices. (EDIT – A leading oil marketer - Shell announced today that prices will drop by Kshs. 15)
Entertainment: Bottle of Tusker beer (at local pub) is Kshs. 120 down from Kshs. 130 (cheaper by 8% from four months ago). Don’t know if this is one pub decision or the competition from new Summit beet launched by Keroche in October 2008 - the first true local competitor since (South African) Castle folded shop about six years ago. How will EABL fight back, and do they have to? Keroche got off to a good start but there has been little post launch marketing.
Communications: Continues to get cheaper as two mobile phone companies have become operational in the last quarter of the year – Orange (France Telkom) and Yu (Essar/Econet). The tone was set by Zain’s successful Vuka tariff, priced at Kshs. 8 per minute to call any network. Market leader Safaricom responded with Jibambie (up to a 63% discount) which enabled their subscribers to make calls at prices ranging from Kshs. 8 down to Kshs. 3 per minute if they bought a bigger denomination airtime voucher. The battle for subscribers is shifting now from voice calls which have reached unprecedented lows to data and money transfer where Safaricom is effectively Kenya’s largest ISP and money wallet.
No change: Electricity: My November KPLC bill is still Kshs. 1,900, same as it was in August, with a fuel surcharge reduction yet to be effected. High electricity prices have been a major cause for concern among Kenyan companies leading to President Kibaki to call for a reduction in the taxes levied on petrol prices and electricity.
But: Related: Is the quality of official statistics inflation data in question?
EDIT - Challenged by inflation, but with a view to improving liquidity, the Central Bank of Kenya today lowered the CBR rate (implied base rate) from 9 to 8.5% and also lowered the bank minimum cash ratio from 6 % to 5% -
Real Estate Moment
» bankelele Real Estate Moment -
$10 hotel room
» bankelele $10 hotel room -
Real Estate Moment
» bankelele Real Estate Moment -
Electric Shock
» bankelele Electric Shock -
Nairobi Expense Account
» bankelele Finally have one full year of data on expenses incurred. As part of an experiment I have tried to quantify daily spending over the last 365 days (and categorized them as follows)
Rent 37%, Investments 9%, Education 9% (bound to go up each coming year), Being a good guy 8% (Gifts 4%, Family 3%, Charity 1%), Fuel 7% (offset by more public transport use), Drinks 7% (socializing & entertaining), Dining 5%, Groceries 4% (not my docket) Communications 3% (take that Michael Joseph), Transport 3% (reading novels in the matatu), Utilities 3% (cost may double this year), Furniture 3%, Recreation 2% (I can afford to play more golf and get a decent handicap), Newspapers 2% (keeping up with politics & finance), Clothing 2% (FYI: Dr. Manu Chandaria only has 7 suits), Repairs 2%, Parking 1%, Personal 1%, Electronics 1%. -
Urban Inflation Index
» bankelele a week early, with some changes
Tracking prices of some urban commodities compared to six months ago and a year ago
Fuel: Litre of petrol fuel (at local petrol station) is Kshs. 101.50 ~ $1.50 (up 15.3% in ½ year)
6 months ago: Kshs. 87.99, Year ago: Kshs. 80.79
despite record world oil prices, government joint tender system has cushioned some impact on the economy – even oil companies are not celebrating
Staple food: Maize flour (2 kg. Unga pack at Uchumi) is Kshs. 73 (up 40% in ½ year)
6 months ago Kshs. 52, Year ago Kshs. 50
farming woes continue, poor crop expected this year
Other food item: Sugar (2 kg. Mumias pack) at Uchumi is Kshs. 145 (down 3% in ½ year)
6 months ago: Kshs. 150, Year ago Kshs. 150 Kshs
new minister trying to clean up notorious sector
Entertainment: Bottle of Tusker beer (at local pub) is Kshs. 130 (up 8.3% in ½ year)
6 months ago; Kshs. 120, Year ago: Kshs. 100
agricultural input costs rising, but post-budget sin tax pushed prices up. You need this to network in Kenya, or switch to Alvaro?
Communications: mobile phone promotion
This month Safaricom has Ongea tariff which has phone calls priced Kshs. 10 per minute all day, while Celtel has a Kshs. 3 per minute tariff (and with a conditional ‘free’ call package thrown in). Safaricom is also promoting broadband hotspots for the entire Nairobi and Mombasa areas.
- Six months go: Safaricom had extended the hours for Kshs. 8 calls on Saasa tariff, while Celtel had Kshs. 4 per minute calls to 3 preferred numbers
- A year ago Safaricom had Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous tariff
mobile communications one of the few things that are getting cheaper
Exchange rate
1 US$ equals Kshs. 67.4 (shilling has appreciated 4.7% in ½ year)
6 months ago: 70.7, Year ago: 66.5
strong , but now sliding, shilling has cushioned some impact of high oil prices, but exporters are complaining
Electricity cost
New addition
My electricity bill in July 2008 is Kshs. 1,860
A year ago was Kshs. 995
Consumption was the same, the culprit was fuel costs adjustment which added Kshs. 820(649c/kwh) to my bill compared to Kshs. 200 shillings (170c/kwh) a year ago as KPLC recently increased the electricity charges which could have some adverse effect on the economy later in the year – already big manufacturers are investing in power plants and alternative generation sources. -
12 Free Things in Nairobi
» bankelele 12 Free Things in Nairobi -
Urban inflation index
» bankelele back to normal
Compared to a year ago
This shows that not much changed for those in Nairobi able to travel around and shop properly at Uchumi that life is pretty normal as far as shopping is concerned.
Litre of petrol: 87.99 shillings (~$5.50 a gallon) and up 18% from a year ago (then 74.29) when you drive around Nairobi you can get prices from about 85 to 92 this week For petrol prices, I have been tracking a brand name station that tends to have slightly lower prices than may parts of the city where the price is at around 91 shillings. And these are expected to go up this year as are electricity bills which are already being billed at 12% higher for residential house. Energy Minister Kiraitu Murungi sounded out another warning yesterday to petrol companies to adjust the prices downwards when international oil prices drop – but the companies have, over the years ignored previous warnings from Ministers and government officials, and not passed on any savings to motorists.
Maize meal ugali (2 kg. unga) 52 shillings (50 a year ago)
Sugar (2 kg. Mumias pack) 150 shillings (no change from a year ago)
Fresh food prices have gone up also. Milk and bread have increased by a few shillings depending on where you shop. The prices of vegetables have gone up, some even up to 4X what they were before the election, but vegetable prices are seasonal and once supplies and fresh harvest kick in, the prices should adjust downwards.
Tusker beer: 120 shillings at local pub - up 20% (from 100 a year ago)
some pubs experienced shortages in the post-election period until the only beer they were left with was Guinness
(Safaricom) Mobile phone promotion: a year ago Safaricom had introduced Saasa - with 8 shillings per minute calls during off peak hours. This year they have extended the hours that off-peak applies, while rival Celtel has lowered the bar with 4 shilling per minute calls to 3 preferred numbers
What i really want from mobile company is for one tariff to focus on cheap data charges – SMS, Internet browsing – while voice can remain expensive
US Dollar exchange rate: 70.7 shilling to the dollar - unchanged (was 69.97 a year ago). But this is abnormal as it does not capture the the strength of the Kenya shilling which had appreciated to about 63 just before the election – from December it has lost 10% against the dollar and 17% against the Euro (overall it is 15% weaker against the Euro a year ago. -
Urban inflation index
» bankelele August 07 – changes from 6 months ago
- Litre of fuel Kshs. 80.79 ~ $1.21 (up 8.75%)
- Maize meal (2 kg. Unga) 50 shillings (no change)
- Sugar (2 kg. Mumias pack) 150 shillings (no change)
- Tusker beer: 100 shillings at local (no change)
- Safaricom promotion: Then: was Saasa - with 8 shillings per minute calls during off peak hour. Now is new shape of Safaricom including a new Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous Tariffic tariff
- US Dollar exchange rate: Kshs. 66.50 (5% weaker against the shilling)
- Plastics items are not being tracked, but milk and bread have gone up since the budget speech read in June.
Personal expenses
I tried using various online services to track expenses, but eventually fell back to Microsoft Excel and built a tracker that fit my needs. For July 2007;
- Rent 30% (high, but it’s safe and close to town)
- Charity 14% (one time event)
- Electronics 11% (new phone, but do I say)
- Fuel 8% (lower than expected, but my daily commute is short)
- Drinks 6% (Rather low, so should not feel guilty)
- Relatives 6% (unavoidable, non recurring expense)
- Investments 5% (should be higher, but there’s nothing promising till end of August)
- Dining 5%
- Parking 4% (take that Mr. Mayor)
- Newspaper 2% (rather high)
- Gift 2% (for every time I visit someone’s’ house)
- Utilities 2% (electricity & water)
- Communications 2% (mostly Safaricom)
- Groceries 2%
- Personal 1%
sports
- I love the new G TV advertisement which compares the three English premiership soccer packages
Get 3 games a month for 0 shillings i.e. Nation TV (NTV)
Get 6 games a month for $70 ~ i.e. DSTV
Or 32 games a month for Kshs 2,750 (i.e. GTV)
but this weekend, Supersport will show opening matches of the big four teams Liverpool, Arsenal, Chelsea, and Manchester Utd
-With all the fallout from the Hungarian Grand Prix, it should be pointed out (to non-F1 fans) that Hamilton started the fracas on Saturday when he deliberately ignored a direct order from Ron Dennis (team Boss) to let Alonso past on the track during the early stages of qualifying three.
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