100 BAT shares cost 71,400... Tafakari hayo wanawanjiku

It's definitely a dream come true but let's also wait and see the companies exempt from this rule coz of " strategic importance" to the government.

Nigerians are special. The "big SHELL COMPANIES ARE 98% OWNED BY FOREIGNERS" isn't true. They have refineries lying idle coz the importers are the connected folk.

1) Don't sell your shares.
2) Start your own firm.
3) Don't sell off your company.

Wanjiku is an endangered species and she endangered by her own kind who has more superior survival habits. Milking dry is the new norm no matter the cost

There is no bottom-line entry called pride.

The North Korean economy is run on an ideology of pride, purity and exclusion. The South is just the reverse. Which would you rather have?

Not all FDI is created equal. You want to attract the type that builds actual businesses, factories etc. The type that only comes to the NSE to make a quick buck and jumps ship at the earliest sign of trouble can bring down a government. Reference the Asian financial crisis. This will lead to Kenyans rioting in the streets one day and could even bring down the government. How? The steps to ruin:

1. Lots of foreign capital comes to the NSE chasing the opportunity to participate in "emerging market growth"
2. Increased Supply, leads to Increased Prices. NSE becomes hot, hotter and hottest. Even the average Kenyan starts talking about stocks.
3. For one unexpected reason or the other, one day foreigners decide to bail from the NSE
4. They sell off quickly before guy on the streets knows whats going on
5. Now they are sitting on a pile of Kshs that they need to exchange to USD ASAP so suddenly shillings becomes super weak
6. Central Bank tries to save the shilling by selling dollars but finds that it runs out of foreign currency as foreigners are selling KES like there's no tomorrow
7. NSE takes a massive nose dive - the guy on the streets who was earlier invested loses a bunch of cash
8. KES loses value so much, price of basic commodities hits the roof
9. People can no longer afford bread etc
10. Riots break out
11. IMF and World Bank step into the picture
12. Austerity yada yada
13. More riots break out
...

No capital exchange controls and full foreign participation in local companies is a powder keg. The speculators come dressed in "FDI" clothing but they are nothing but gamblers.

[quo t e=Wakanyugi]

Good points.

However we have had very few capital controls for many years. This is a major avenue for speculative money, the kind of bad FDI you refer to.

On the other hand lifting ownership ratios on Kenyan companies potentially allows the Hellios, KLM's and Vodacoms of this world to bring in more capital, technology and talent to make KQ, Equity and Safaricom grow. This is good for us.

Limiting such investment, as we have been doing, adds absolutely no value, except pride and in fact does not protect us from bad FDI.
[/quote]


I want to highlight something on a different ground but can be related to this . Reading the paper Jana there was a protest written by bamburi and east African Portland about the Chinese firm responsible for building SGR were importing their own cement instead of getting it from local manufacturer . I'm trying to see a situation where if these Chinese were told that there can do whatever they want to get cement from wherever they want then definitely they will import from China to increase the profit margins at a cost of local companies that in turn hire kenyans .so if you read point number 3 from mv_ufanisi you will understand how an ordinary Kenyan will directly he affected . Foreign investment is good but a a reasonable percentage should be left for kenyans

I agree 100% with all your points except the last bit . You gave a good example of most investors in Canada are US Citizens . I agree . There is a huge difference between an investor who invests in North America and an investor who invests in African markets,In this case kenyas markets are prone to insecurities , political instability amongst others parameters . So when we talk about foreign investors investing in Kenya it's a gamble for them . But in Canada it's a surety . Anyway them bringing money and technology is a good idea and best for our economy . My fear is when they chose to migrate "en mass " to look for other greener pastures .
Lastly hypothetically let's say company A(specialising in tourism industry ) floated shares and 100% of shares are bought by some American hedge fund company . Then one day the terrorist attack our country , in your own opinion what will the hedge fund managers do with their shares ? Will they dump it all or will they say let's be fair to Kenyans who are employed in this company and only sell 50% and let the other 50% remain so that they don't lose their jobs ..in your own case what would the hedge fund managers do ?

remember what happened in Nigeria recently . the foreign investor were damping their stocks like never before and brought all their money to Kenya and South Africa. people were losing jobs like crazy and there was an honest appeal to foreign investors not to flee

http://www.vanguardngr.c...nigeria-stock-exchange/

"Commenting on this development, some shareholders who spoke to Investors Forum described the foreign investors as casino players, who want to make money at the detriment of the economy, others attribute their action to fears of the outcome of the forthcoming election. Excerpts:

Alhaji Gbadebo Olatokunbo, shareholder activist: I will describe the foreign investors as casino players. I have been a stock market player for more than five years. They are not here for the interest of the market. They are here just to make money and if in the process of making money they harm our economy that is none of their business because we allowed it.
- See more at: http://www.vanguardngr.c...e/#sthash.z5zIKOlg.dpuf