Battle of the Skies

Well finally we have another David trying to take on Goliath. This time in the name of Air Uganda. We can only hold our breath and hope not to turn blue!

Air Uganda is a consortium that is made up of Aga Khan Development Network and the meridian airlines group from Italy. This is clearly a total departure form the amateurish attempts of the East African airlines and the VIA to take on Goliath (Kenya Airways). This is a well heeled, monied and managerialy experienced outfit, which they have to be because KQ takes no prisoners.

The Nairobi-Entebbe route is undoubtably one of the most profitable in the world, from an airlines point of view. And the most unbelievably expensive route if you are a passenger. After all its just a 45 minute hop, so why on earth do you have to pay $350 for a return ticket. You can almost get to Dubai with that and that is a 5 hour flight!!!!!!

The answer comes in one word, MONOPOLY. KQ is king on this route and if you dont like it catch the bus. They can afford to undercut competitors just top put them out of business and then raise the price again. They have doen that so many times.

Thats why Air Uganda is a different kettle of fish, its backers have deep pockets and are aware of the lurking dangers of this bare knucled fight. But they have public goodwill and they also have a KQ straining under the load of too many passengers and too few planes, they are victims of their own success and passenger service is going down hill, delays are a fact of every day life.

We thus can only look forward to having more compettition and hence better pricing on the Nbi-Ebb route.....afterall we do deserve it.

But then again, is a duopoly really a competitive environment. What stops these two chaps having a coffee break together and fixing the prices...........Yes it can happen, so we watch and wait.

Hitting the Uganda Stock Market For Six

Well almost a year ago I made my first tentative steps investing on the USE. My target was Stanbic Uganda. And we all heard the rumours of who mught be the real shareholders of this patch of financial muscle......thats kabozi for anoher day.

Now the IPO was a roaring success as Ugandans and kenyans dived in head first and that includes myself. The price was an attractive UGX 70/-. Which in all honesty was a good deal indeed, considering the way the bank has been performing, paying dividends every year to shareholders for quite a while.

Now the price of the shares is UGX 205/-, that is almost 300% growth in value in about a year!! Am I pleased? Very much so. It has balanced out the lower returns my Kenyan shares have given, by a mile.

With my appetite whetted for more stock action I am eyeing a couple of shares in other Ugandan companies.

An MTN IPO would be a dream!!!

Research in the Bag

I don't know if you saw this story in the papers 2 days ago, but if you didn't well I will give you a brief summary:

A bag with over 20 million Ug Shs was stolen from the official car of the Commander of Defence Forces, General Aronda Nyakairima. The money was for his 'Research' Project! And his body guards have been arrested and will soon be court martialled.

Its not the fact that the theft was attributed to indiscipline and not low pay in the Forces that left me gobsmacked, but that the fact that someone so high up the food chain would have to carry research money, in cash, in his car!!! That begs the question what is the research project and why is it not managed as part of the regular military administrative duties and pay outs made via the paymaster??

Was the research proposal reviewed and passed by an ethical committee??? But would anyone dare to reject the boss's proposal?

I can only amuse myself trying to imagine the good general himself haggling with his irritated and overworked'research' assistants out in the fields somewhere, and trying to beat a deadline.
Oh Yes: And the world Journal of Military Science is interested in the end result.

Or is there really a research project?? HAAAA!

But then again, this is the republic we are talking about....things are done differently.

Our History is Back

Our history has come back to Haunt us. As always.

Forrest Whittaker just played, to much critical acclaim, Idi Amin in the movie 'The Last King Of Scotland' and to be honest I have decided not to watch it because I feel it it will just bring back all the painful memories that many of us carry.

The trauma of the years 1971-79 have left few families unscarred. We all have an unle Fred that nobody can quite tell you what happened to him., just that he died during 'Amin's time'. The wounds have not quite healed, but like the truly stoic people we are, we quietly brush it under the carpet and act like nothing ever happened. The onus is on the inquisitive to let sleeping dogs lie.

I remember the famous travel writer, Paul Theroux, comment that when he visited Makerere after many years he found all the students he met always asked him what stories they should write about in order to be successful. His answer was simple, 'write about your own lives, your history.'

And there is the paradox, our history is rich, and our stories numerous, but nobody is writing them. Trauma is not a reason not to talk about the gaps in our lives. If the jews had followed this line of thinking, would we ever have heard of the Holocaust?

So now someone else is doing the writing for us. I am sure 'The Last King Of Scotland' is great, but it is written from the perspective of a fictional scottish doctor in Uganda heading out into deepest, darkest Africa in order to find himself(or was that supposed to be Bob Astles?).

Try as we might we might, we cant shake this monkey off our backs, and now with Forrest Whittaker winning the Best Actor Golden Globe, the BAFTA's and a good bet for an Oscar for playing the role of Idi Amin, this will have the effect of invigourating the global image of Uganda being the place where that 'Man' was president........some people actually still think he is.

Its a stigma we dread, one we try to hide from, even when we travelling all the way in far off New Zealand. But that 'Man' is going nowhere, probably enjoying our discomfort, all from the comfort of his grave. Thats our history and we need to confront sooner or later..

Only on Nalubale!

Only in Uganda!: free enterprise, private initiative, innovation and the insatiable desire to talk.

Stanbic Has Landed

From a IPO priced at 70/- a share to one priced at 205/-, that is almost 300% investment growhth. Not many investment schemes can deliver that. And it is a well deserved pat on the backs of all long suffering sons and daughters of the soil.

I bought 20,00 shares, on the 2nd last day of the offer.......and boy am I smiling, wish I hads bought more, just did not think I would be allocated a bigger share.

Its great that a public holiday has dampened a bit of the euphoria, because the hard work of maintaining ones new found wealth, and more so keeping it growing, has begun. The stock market can be a ruthless place for the unweary, but with knowledge and research one can make a tidy profit.

International fund managers and other institutional investors who missed out on large block of shares will be buying up on the secondary market and this may drive up the price further, tthen it will decline to a lower level and stabilise.

Stanbic traded 4 billion shillings worth of shares on day one and now has a market capitalisation of $585 million!! This is second only to KQ and EABL on the USE. One must realise that Ugshs 203 for this share is peanuts for the kenyan investor, so expect greater demand and even higher prices when the USE merges with the nairobi Stock Exchange.

In other words: HOLD ON TO YOUR STANBIC SHARES!

A Kenyan Colony?

I am sure many have read the article by Dr. Ian clarke that appeared in today's edition of the sunday Vision newspaper. He simply stated something that we all have noticed, but typically we mutter under our breath and look on.

The invasion of the kenyan professional manger on the Ugandan scene is a well established phenomenon and shows no sign of subsiding. The entire senior management of many multinantionals and subsidiaries of kenyan companies have all been hired almost exclusively from across the border.

This in itself is not a bad thing as they have capabilities that the 'locals' may not have. and for ther economy to grow it is always necessary to import migrant skilled labour from anywhere on the planet if necessary. But is there really that dire a shortage of skilled local labour??

What isn't okay is the fact that ugandan professionals in Kenyan do not enjoy the same upward mobility. Getting a work permit is an absolute nightmare , even for someone who has lived and worked in Kenya for 10 years. You are treated like you arrived just yesterday.

It is also a fact that there is a very obvious glass ceiling in many compnaies above which a non citizen can not be tolerated......ask the Ugandan pilots in KQ. Their stories are tragic, they are confined to flying only the oldest planes in the fleet, 737-200, and thus can only fly in East Africa. Advancement is non existant, even after 10 years of service.

The fact one manages to hold a work permit does not mean your spouse will have one too. In fact the odds are never. This also applies to foriegn wives of kenyan nationals too. The pressure is basically on you to change your citizenship.

So it is quite painful to see how welcoming and should I say naive Ugandans seem to be. We are not being treated as we treat others. Hasn't the time to put ourselves first come! The lack of patriotism and self worth is disturbingly present in our psyche.

Our leaders willingness to hand over everything, including the family silver to anyone, especially foreigners, with unbeleivable prejudice towards fellow ugandans, without as much as a second glance is a tragedy that we need to confront, sooner rather than later.

A new econmic beginning???

The Stanbic IPO is now officially over and the returns are in. We all have got the shares we applied for and for many this is the birth of their stock portfolio. With it will come the ups and downs that the roller coaster ride called the stock market will bring.

But the upside is that it is also a new dawn in the way people save and grow their wealth. I need not go into the lousy interest rates that banks offer and the very high ones they charge when you go to borrow it back!! Now a new way of investing money other than the usual suspects: land, houses, bufundas and the very fashionable but rediculously named high schools.

Expect to see unit trusts or mutual funds showing up on the scene. Expect more companies to launch IPOs, no doubt impressed by the long queues of eager citizens, having dug up the money from a hole in the bottom of the garden and coming out to buy shares. These are truly exciting times.