“We have surpassed the minimum success threshold of 50% set out in the prospectus and also  met the minimum shareholder’s requirement of 1,000 to list on the Main Investment Market Segment of the Nairobi Stock Exchange.  In addition, we have met the minimum shareholding requirement that at least 25% of the shares in the company be held by not less than 1,000 shareholders and that at least 40% of the Offer Shares are allotted to local investors” said Ashford- Hodges.

The Chairman went on to say: “The shares reserved for retail investors and for employees, agents, and policyholders both recorded oversubscription; however, international and institutional investors did not take up their allocations fully. The high take-up by retail investors shows the strength of the British-American brand amongst East African investors. We now have over 28,000 shareholders and are very grateful for the support our local investors have given us”.

“The positive market reception clearly demonstrates local investor confidence in the Group’s long-term value proposition. We are also happy that several institutional and international investors also responded, though not to the levels we expected,” he added.

The offer which opened on July 12^th and closed on August 5^th sought to raise Ksh5.85 billion by floating 650,000,000 new ordinary shares at an offer price of Ksh9 (nine) per share.

“A 60 percent subscription is a commendable outcome in the light of what is currently happening in the financial markets. It was unfortunate that the US debt crisis escalated right in the middle of the offer period, causing loss of appetite amongst institutional investors especially those outside Kenya. Even though the offer has not been fully subscribed, we have surpassed the minimum success threshold of 50% set in the prospectus” said Ashford- Hodges.

Commenting on the outcome, Group Managing Director Benson Wairegi said “the level of subscription will still enable us to meet the strategies of the Group”.

“We are very bullish about our prospects. Our strategy is on course and the Board of Directors will now have to prioritise on some of our projects and the timing for their implementation. The IPO has given us the opportunity to increase the scope of our operations and widen our footprint across the East African region. Locally, we now have the resources to tap the economic potential nascent in the newly created counties as earlier planned. Our balance sheet is even stronger and we should not have any problems financing the high value projects we had envisaged,” said Mr Wairegi.

“Through this  listing, British-American, has reached a significant milestone in its long history in Kenya” he concluded.

IPO Results by Numbers

Stephen Wandera, managing director, British-American Insurance Company(Kenya)

Stephen Odhiambo Wandera is one of the coolest insurance MD’s  in the market. Mr Wandera is the MD of British American Insurance CompanyKenya, a subsidiary of British American Investment Company. I had a chance to talk to the tall bespectacled MD not in an executive office but in a cocktail atmosphere. You know the drill- drinks flowing, smooth jazzy music in the background and a clutter of the glasses.

And today, I want to focus on this CEO and I will tell you why. The insurance company is a key cog of Britak, the company whose stake you just bought the other day. The monies raised in the IPO will also be used to expand its services across the counties, bringing more clients and hopefully, more cheddar for us as dividends.

He is a 51 year old executive that has been in the industry for 18 years. He joined the company in 1993 and has risen to the post of MD. In addition to that role , he is the chairman of the Association of Kenya Insurers and a governor at KEPSA(yes, those guys were way ahead of the new constitution!).

He is one of the fellas who may change the face of the industry. And it needs change. Kenya for instance has an insurance penetration of less than three percent. Insurance penetration in Uganda remains the lowest in the East African region at only 0.6% when compared to Kenya’s 2.6%, and Tanzania and Rwanda’s  1% respectively. This is compared to South Africa’s 14% or Malaysia’s 10%.

This is despite the number of insurance companies being 44, almost like the number of banks. Access to banking services meanwhile is more than 50% of the bankable population.  This low penetration of insurance has been blamed on the negative perception of insurance, its cost and distribution.

Mr Wandera however, views this state of affairs as an opportunity for growth. And during the chit chat, he revealed that British America Insurance is looking at how to expand its distribution through models like bancassurance, where insurance products are offered in banking halls.

It is also exploring how to use technology to cut the cost of acquiring customers, paying premiums and other expenses that make insurance products expensive.  Technology like M-Pesa, for instance saves clients the time and expense of walking to a bank or insurance company to pay premiums.

Making telesales is also a cheaper way of attracting customers.  With Facebook and Google introducing Video Chat technology, financial advisors can even sell you a product via Facebook and just show up to sign the papers.  Insurance needs an Equity Bank, a player that will demystify products and make them a must have for the masses. With its reputation and solid financial background, British American can do that.

This executive, who holds a Masters Of Business Administration,  a Bachelors of Arts degree from the University of Nairobi and is a fellow of the Chartered Insurance Institute, maybe the catalyst to improve the industry’s state of affairs.

The Business Daily says the banks took up 47.2% of the bond followed by institutional investors who bought 42.9% and retail buyers who were allocated 9.9% of the medium-term paper. The point was it was fully subscribed in an environment that is not very optimistic.

While comparing the Shelter Afrique to the recent British American IPO is like comparing two different companies and processes (aka apples and oranges), I am tempted to ask; Is this a sign of things to come for the British American IPO?

Honestly, I do not know and I am also waiting for results of the subscription as eagerly as you.  However, all indications and reports indicate that it was headed for a subscription when it closed on August 5^th.

All I know is one thing. No matter the dipping of the NSE share index, the market has the appetite for good investments. And British American IPO was such an investment.

Oil prices are to go up by one shillings which may lead to a rise in inflation

Gloomy, gloomy, gloomy. Folks, fuel prices are up. Yes, its now KSh116 and some cents juu which no one remembers.  Things are getting thick bwana. The increases in prices will lead to a rise in inflation. The last time I checked it was 14%. And with these prices, it is bound to get higher.  And if u have money lying in the bank, ur in trouble which is as thick as a Daima yoghurt. The value of the money in a bank is going down faster than call prices.

Invest that cash with British American and escape the wrath. This is because British American Asset Managers, a subsidiary of British American Investment Company, has experts that can invest your money and ensure you get maximum return on investment.

This is by investing in either the British-American Equity Fund or British American Balanced Fund. These funds are inflation busters and always deliver high returns to investors. For instance since 2005, when both funds were launched, the equity fund has registered a net return of 65%. The balanced fund on the other hand has registered a net return of 79% during the same period. This is compared to the 8% registered by the NSE.

The balanced fund is invested in both equities which is shares and fixed income securities like T-bills and bonds. Equity fund is invested in stock exchanges in the region and some offshore listed companies.

Though the minimum investment is KSh250,000, you can start with as little as KSh100,000 and upscale with time. You can also take comfort in the fact that your money is managed by professionals whose full time job is to spot opportunities and invest. Also, British American Asset Manager has grown at an average annual rate of 142%. Last year, it doubled the funds under management to KSh17.5 billion with a market share of 40%.

Oooh, na stima imepanda. Reply to this post and I will hook u up with a financial advisor who can help you invest in the above.

British American has education policies to help your child get through school

It is August and if the number of teenagers in Nakumatt lifestyle is anything to go by, you know that schools have closed. The battle for the remote control begins. However, at the end of this term, more serious issues will abound.

You will be expected to pay school fees for your kid or even your relatives. And we don’t complain because quality education is the best present a parent can give their child.

That is why today being a product Wednesday, I want us to focus on how to secure your children’s future and save money in the process. To do this, British American has three education policies to help you achieve this. Vuta stool, sit and listen(ooh, I mean read)

• Super E plus
• Elimu Bora
• Invest Plus fund

Super E plus

It is a combination of insurance protection and savings that allows you to prepare for the cost of education. Best of all, it allows you to have a continuous growth fund. You get benefits such as death, accidental death, living benefits, disability benefits, maturity benefit, tax relief and guaranteed benefits.  What that means is that incase you die(God forbid) are injured in an accident(May He guide ur matatu driver) you and your kid are taken care of. It also has guaranteed cash bonuses. With each premium paid, the cash value of the plan increases.

Elimu Bora

Elimu Bora combines insurance and savings. Yaani you can be saving for cash and still make sure your kid gets insurance.  It accumulates funds for  your  child’s fees while in secondary and you also get a lump sum amount after joining university.

Under this unique plan the child will be the insured person and you enjoy benefits such as:

• Savings

• Cash Bonuses
• Hospitalization Cover
• Death benefit
• Monthly Income
• Last Expense Cover
• Tax Benefits

You can be able to dictate the terms of the policy from how you want to save and pay according to their needs.  You can also use the policy as security to get a loan and incase the child decides not to join university, the funds are available to start them off in life. Yes, you can get the cash and they are kichwa ngumu, start for them a biashara(or lock him in a room, give a three hour lecture and an admission letter)

Invest plus fund

This one gives you a choice of selecting an investment strategy that you can adjust as the years go by. You can save up to 50% of your education expenses. It is systematic because the Unit Linked policy allows you to select an investment strategy that you can adjust as the years go by. This is also convenient because your investment will be part of a pooling vehicle that enjoys investment opportunities that might not otherwise be available to them as individuals.

The plan is very flexible.  You can choose to invest their savings premiums in four distinct investment funds designed to meet your investment objectives. You choose the life cover you want, can increase future premiums to maximize your investments and inject lump sum amounts into the policy whenever you have extra cash.

What are you waiting for? Drop us a line here and secure your kids future. But for now, walipie tuition…

There are some folks who by now, which is barely a week from payday, are already in the borrowing mode. Come next week, they will do the actual borrowing because they have spent all their money. Yet they earn enough to sustain them. So, why the borrowing? It boils down to lack of a budget.

That is why today I will focus on the basics of writing a budget:

Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense. The key for this process is to create a monthly average so the more information you can dig up the better.

Record all of your sources of income. If you are self-employed or have any outside sources of income be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted then using the net income, or take home pay, amount is fine. Record this total income as a monthly amount.

Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, shopping, chama, utilities, entertainment, dry cleaning, auto insurance, retirement or college savings and essentially everything you spend money on.

Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, cable and/or internet service, taka taka pickup and so on. These expenses for the most part are essential yet not likely to change in the budget.

Variable expenses are the type that will change from month to month and include items such as groceries, fuel, entertainment, eating out and gifts to name a few. This category will be important when making adjustments.

Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.

Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense.

If you are in a situation where expenses are higher than income you should look at your variable expenses to find areas to cut. Since these expenses are typically essential it should be easy to shave a few dollars in a few areas to bring you closer to your income.

Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.

Next time, we look into these points in details. Are school fees burdening you? If so, lets hook up tomorrow and I will tell you how to avoid the headache .

Stockbrokers have reported a massive dash for the British American IPO as east Africans try to beat the deadline .  The British American Investment Company IPO comes to a close at 3pm today. That gives you like eight hours. Don’t wait for 2:55 to start rushing there.

Hurry because reports reaching us indicate the IPO has already reached 50% subscription and many of the brokers expressed optimism that the offer would be subscribed. Even an article in the Business Daily seems to confirm this.

Internationally, investors in London and South Africa have been gobbling up the offer and according to Mr Benson Wairegi, the company’s CEO, they are going to take up all allocated shares. Regionally Uganda is also upping intake as the people who gave us the ‘ full, fulluu condition video” and a rapping president now own a piece of  British American.

The IPO which was launched on July 12^th is targeting to raise Ksh. 5.8 billion to drive the company’s expansion plans.

“We are confident of a  full subscription, given our track record of profitability, good management and expansion strategy,” said Mr Wairegi.

Bwana, a share is going for KSh9 and the minimum is 2,000. Close this page and run to your stockbroker. With this chilly weather, the exercise will also keep you warm.