Members seeking to exit Safaricom Investment Co-operative (SIC) are having trouble finding buyers for their shares, highlighting the difficulty of liquidating investments in saccos.
The illiquidity of SIC’s shares has been compounded by the value of the stocks remaining at Sh52.5 each since 2019, a decline from the peak of Sh525 seen in 2017 and 2018.
The fall in the share price is partly due to lower returns in recent years.
“The movement of shares in the secondary market has been slow in recent years. We note that this has caused pain and frustration to investors who have decided to sell their shares,” Rabecca Bisanju, chairperson of the supervisory committee says in SIC’s latest annual report.
“The viable option would be to improve the performance of the company to make it attractive to the general public in order to accelerate share movement in the secondary market. The implementation of the Strategic Plan 2023 – 2027, in particular strategic theme pillar one (growth of the SIC investment portfolio), is expected to result in a dividend payout of at least 13 percent by 2027.”
SIC has more than 5,000 investors. The investment co-operative, which draws the bulk of its revenue from the sale of land and houses, helped its members trade 1.66 million shares in the year ended December. This was slightly down from the volume of 1.67 million shares traded in 2022.
Members of other saccos –focusing on the basic deposit and lending business— also have difficulty liquidating their share capital as they have to find another member willing to buy them out.
To leave SIC, a member must offer their shares for sale on a first-in, first-out (FIFO) basis. Alternatively, a member can sell their shares to another existing member, but this is arranged via email. If there are no buyers, the shares can’t be sold, and the member is stuck with them until there is interest from other investors.
Consequently, SIC has paid a rebate of less than 10 percent since 2019 when it made zero distributions. Last year, it paid a rebate rate of 5.75 percent amounting to Sh143.8 million, down from seven percent (Sh176.9 million) in 2022.
The company recorded a net operating surplus before rebates of Sh203.4 million last year, down from Sh268.1 million in 2022 on the back of reduced revenues in the core real estate business.
Sale of land and houses dropped to Sh1.5 billion in the review period from Sh1.8 billion a year earlier, resulting in gross surplus from this business line declining to Sh437.5 million from Sh471 million after netting off cost of acquiring the properties.
In its latest change of leadership, SIC’s board has appointed Churchill Winstone Ochieng as the new chief executive, replacing Sarah Wahogo.
Share this news
This Year's Most Read News Stories
East African Community Bloc Dismisses Fake Common Currency
The secretariat of the East African Community (EAC) regional bloc has dismissed a post on X, formerly Twitter, which claimed that the bloc’s member countries have launched a common regional currency.Continue Reading
Africa: Rwanda Gets a Grip Of Marburg, But Mpox ‘Not Yet Under Control’
Monrovia — The Rwanda Minister of State responsible for Health, Dr. Yvan Butera, cautioned that while the country is beginning to see positive signals in its fight against the Marburg virus, the outbreak is “not yet over”. He, however, expressed hope that “we are headed in that direction”. The minister said the epidemiology trend, since the disease was first discovered in the country more than a month ago, is moving towards fewer cases.
Dr. Butera, who was giving updates during an online briefing yesterday, said in the past two weeks, only two deaths were recorded while 14 people recovered from the disease. He said Rwanda was expanding its testing capacity with 16,000 people already inoculated against the disease.
The priority right now, Butera said, is “rapid testing and detection”.
Marburg is a highly virulent disease transmitted through human-to-human contact or contact with an infected animal. The fatality rate of cases, which has varied over the period, is more than 50%, according to the World Health Organization. WHO said the highest number of new confirmed cases in Rwanda were reported in the first two weeks of the outbreak. There’s been a “sharp decline” in the last few weeks, with the country now tackling over 60 cases.
At Thursday’s briefing, a senior official of the Africa Centers for Disease Control, Dr. Ngashi Ngongo, said mpox – the other infectious disease outbreak that countries in the region are fighting – was been reported in 19 countries, with Mauritius being the latest country to confirm a case. He said although no new cases have been recorded in recent weeks in several countries where outbreaks occurred previously – including Cameroon, South Africa, Guinea, and Gabon – Uganda confirmed its first Mpox death. This, he said, is one of two fatalities reported outside Central Africa.
Dr. Ngashi revealed that there was an increase in cases in Liberia and Uganda. He said mpox cases were still on an upward trend.
“The situation is not yet under control.”
Source: allafrica.com
Tanzania: Samia Hands Over NBC’s 354m/ – Crop Insurance Compensation to Farmers Affected By Hailstorms
President Samia Suluhu Hassan, has handed over a cheque of 354m/- from the National Bank of Commerce (NBC) as compensation to tobacco farmers, who were affected by hailstorms during the previous farming season in various regions across the country.
Handing over the cheque in Dodoma, the compensation is part of the crop insurance service provided by NBC in collaboration with the National Insurance Corporation (NIC).
Furthermore, President Samia has also handed over health insurance coverage to members of the Lindi Mwambao Cooperative Union based in Lindi Region, through the Farmers’ Health Insurance service provided by the bank in partnership with Assurance Insurance Company.
While visiting the bank’s pavilion at the Nanenane Agricultural Exhibition and being received and briefed by the bank’s Managing Director, Mr. Theobald Sabi, she said: “This crop insurance is one of the crucial solutions in ensuring farmers have a reliable income, without fear of challenges such as natural disasters, including hailstorms.
“I call upon all farmers in the country to make the best use of this important opportunity by accessing these kinds of insurance services. I also highly commend NBC and all the stakeholders participating in this programme.”
Elaborating further on the crop insurance service, the Minister of Agriculture, Hussein Bashe, stated that it will help to recover the loss farmers incurred, especially in various calamities beyond their control.
Citing them as floods, fires, and hailstorms, which have significantly affected the well-being of farmers and caused some to be reluctant to invest in the crucial sector, Mr Bashe added: “However, our President, this step by NBC is just the beginning, as this is the second year since they started offering this service, and the results are already visible.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
“As the government, we promise to continue supporting the wider implementation of this service, with the goal of ensuring that this crop insurance service reaches more farmers.”
ALSO READ: NBC participates in TFF 2023/24 awards, promises to enhance competition
On his part, Mr Sabi said that the farmers who benefited from the compensations are from 23 primary cooperative unions in the regions of Shinyanga, Geita, Tabora, Mbeya, Katavi, and Kigoma.
He added: “In addition to these insurance services, as a bank, through this exhibition, we have continued with our programme of providing financial education and various banking opportunities to farmers, alongside offering them various loans, including loans for agricultural equipment, particularly tractors, to eligible farmers.:
At the NBC booth, President Samia also had the opportunity to be briefed on the various services offered by the bank to the farmers namely crop insurance and health insurance services.
There, the President had the chance to speak with some of the beneficiaries of the services, including the Vice-Chairman of the Lindi Mwambao Primary Cooperative Union, Mr. Hassan Mnumbe, whose union has been provided with a health insurance card from the bank.
Source: allafrica.com
