Business highlights – Retailers hike cooking gas prices by Ksh330.

Posta proposes 64% increase in mail box charges

  • The Postal Corporation of Kenya (PCK) has proposed an increase in mail box charges that will see the prices paid by companies, charities and box rentals in remote areas rise by between 38% and 64%
  • The cost of sending letters and parcels internationally will also rise by as much as 43%
  • The Corporation is planning to reverse a trend of declining revenues

Communications Authority of Kenya Director-General, Francis Wangusi said that the proposed rates are meant to match with the costs of postal service provision and maintenance. On his part, Postmaster General, Mr Dan Kagwe said the justification for new rates is that the cost of mail conveyance, staff costs, fuel costs, rent and maintenance of fleet has gone up.

In a statement issued late last week, Wangusi noted that the cost of renting a personal letter box will remain at Ksh2,320 if the new rates are implemented. However, corporate bodies will have to pay Ksh10,960 up from Ksh6,960.

Renting special corporate boxes, usually extended to philanthropic organisations, will go for Ksh7,220 up from Ksh5,220. The cost of renting sub-post offices, which are usually outposts of a corporation in remote areas, will go from Ksh930 to Ksh1,530.

READ ALSO: Posta Kenya migrates from analog to digital

Targeting new market segments, PCK also wants to introduce “stand alone boxes” in shopping malls, in upmarket gated communities and petrol stations.

The Corporation has been trying to raise revenues that have suffered due to the penetration of electronic communication technology in Kenya. Last year, the corporation forgave letter box debt and launched new products in an attempt to attract more Kenyans back to using its services.

Cytonn woos growing middle-class with Ksh25 billion residential estates

  • Cytonn is set to develop two mega residential estates valued at Ksh25 billion as the company sets its sights on Kenya’s growing middle-class population
  • The investment firm plans to launch The Ridge, a Ksh10 billion project which sits on 9.87 acres on the Northern Bypass in Ridgeways
  • The firm also expects to break the ground for a mixed-use development on a 100-acre piece of land in Ruiru in August on which it will build 1,400 residential units, a commercial centre and a four-star hotel

The Ridge will comprise 782 housing units, a convenience retail store and other social amenities. The asking price for the Ruiru project, which Cytonn says will be more spacious, will be similar to The Ridge, but the options will only be two and three-bedroomed units.

Cytonn-Project-Manager-Peter-Karenju-and-Niko-Tiula-of-Finish-architect-company-AUD-Architects-after-signing-a-partnership.-Looking-on-is-Cytonn-Legal-Officer-Doreen-Onwonga.

Finnish private equity fund and financial services group, Taaleri Plc in December announced that, in partnership with Cytonn, it plans to invest more than Ksh10 billion in East and South African real estate projects.

READ ALSO: Cytonn Investments buys 25% stake in Superior Homes, announces Real Estate Development Partnership

The two firms have invested approximately Ksh4 billion in projects in Nairobi, Kiambu and Meru counties. The two upcoming projects are being financed with the help of Taaleri Plc as well as internal resources.

Retailers increase price of cooking gas for the first time in two years

  • Liquified petroleum gas (LPG) marketers have increased the cost of refilling cooking gas cylinders as the cost of importing the commodity from the international markets also rises
  • Prices have increased by an average of Ksh330, according to data by the Kenya National Bureau of Statistics (KNBS)
  • The Bureau said refilling a 13-kilogram gas cylinder cost an average of Ksh2318 in February from Ksh1989.9 a month earlier

This is the first time in two years the cost of LPG has been adjusted upwards, adding more pressure to household budgets. Cooking gas prices dropped below Sh2000 last July after the Treasury removed the value added tax on LPG.

Kenya sources LPG mainly from Saudi Arabia and imports an average of 14,000 tonnes per month. The LPG market has become lucrative for investment in the past two years, driven by rising demand for the fuel. KNBS data indicates the consumption of LPG increased by 188.93% to 180.83 metric tonnes in 2016 from 62.65 metric tonnes in 2015.

READ ALSO: Kenya to start production of commercial synthetic fuel sourced from plastic waste in March 2017

These developments come at a time when estate vendors control over 70% of the LPG market currently. They have thrived by offering cutthroat prices, as low as Ksh1650 for refilling the 13-kg cylinder since 2015. This has allowed more poor households to adopt LPG an alternative fuel. The increased uptake has also been boosted by the standardisation of the cooking gas cylinder valve and aggressive marketing of the LPG as a cleaner energy than firewood and kerosene. Higher prices could lower the demand for LPG as thousands of households struggle to survive due to a high cost of living triggered by a spike in food, fuel and electricity prices.

CMA encourages small businesses to list on the Nairobi Securities Exchange

  • The Capital Markets Authority is encouraging small and medium-sized enterprises (SMEs) which have potential to list at the Nairobi Securities Exchange
  • A company wishing to list is required to have Ksh10 million in paid up capital
  • CMA Chief Executive, Paul Muthaura said that the Authority has so far, signed up 70 potential firms

The move is in line with the objectives of a 10-year Capital Market Master Plan that it started implementing in 2014. Under the strategy, the CMA targets about three to four new listings every year on the Growth Enterprise Market Segment of the NSE. Since January 20, CMA has been engaging firms that have huge growth potential to sign up for a business training and advisory session that is scheduled between March 30 and 31.

The NSE launched what is known as the Growth Enterprise Market Segments (GEMS) market in January 2013 in order to allow small and medium sized firms to raise capital, while benefiting from increased profile and liquidity within a regulated environment.

Global Compact Network Kenya representative CEO, Phyllis Wakiaga with Nairobi Securities Exchange CEO Geoffrey-Odundo-during the signing of the Code of Ethics for Business at the NSE offices on May 30, 2016

GEMS is self-regulated by the NSE and has lower entry requirements compared to the Main Income Market Segment and the Alternative Investment Market Segment.

A company wishing to list is required to have Ksh10 million in paid up capital compared with Main Investment Market Segment’s (MIMS) Ksh100 million and Alternate Investment Market Segment’s (AIMS) Ksh20 million.

READ ALSO: Kenyan SMEs among those set to benefit from free technical training courtesy of AfDB

CMA’s target is to have approximately 40 companies on the GEMS by 2023. However, the segment has attracted a few firms, with only four listed so far. They include Flame Tree Group, Kurwitu Ventures, Atlas Development & Support Services and Home Afrika.

Muthaura said they have engaged consultants who will guide SMEs on identifying business needs, strategy issues, developing business plans and considerations for the appointment of advisers and other agents.

 

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