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Comprehensive List of B2B Payment Services in Africa

Safaricom’s Mpesa for Business

Safaricom is the largest telecommunications company in Eastern Africa. It provides voice and data services but the company is most known for Mpesa, a mobile money transfer service. It’s the most developed mobile-phone-based financial service in Africa with over 37 million active customers operating across 7 countries. These include the Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique, and Tanzania.

The company has in the past few years developed several payment solutions targeted towards business enterprises:

  1. Paybill Service – a cash collection service that allows organizations to collect money from their clients through M-PESA.
  2. Business Payment Services – a service allows an organization, through its M-PESA account, to transfer money to another organization’s M-PESA account within the M-PESA system.
  3. Bulk Payment Services- this service allows a business enterprise to make payments to groups of people/ in one go. For example, payments to suppliers or contractors.


WorldRemit for Business

World Remit is a UK-based international money transfer platform. Over the last nine years, the company has grown to serve over four million customers, across 150 countries worldwide. You can send money to your family or friends overseas via their website or app(Android & IOS). The person on the receiving end has a variety of options including bank deposit, cash collection, WorldRemit wallet, mobile airtime top-up, and mobile money.

In 2019 they launched WorldRemit for Business. This recent service allows small and medium-sized business owners to pay their employees and contractors in 140 countries worldwide. These include fast-growing emerging markets such as Kenya, Ghana, and South Africa.

WorldRemit’s goal with this recent service is to:

  1. Drive down the cost of cross-border payments for businesses.
  2. Speed up the process from the time to sign up for the service to the money transfer.
  3. Offer a variety of payout methods and provide suitable options for people in different regions

However, their business service is available for UK-based businesses only.

Amazing Success Stories: Top Companies Listed on NSE Kenya

Today we highlight some amazing corporate success stories. Companies that embraced excellence, innovation and a go-getter spirit. As a result, they have risen to the top to be listed on the  NSE Kenya. This culture of resilience and excellence has helped them overcome the many challenges every business faces in its journey to achieving their corporate visions.

Nairobi Securities Exchange (NSE Kenya)–A story of evolution

1954-1999

1954:The Nairobi Stock Exchange (NSE) was registered as a stockbrokers’ association. Back then buying and selling of shares was negotiated over the phone or over a cup of tea.

1990-1991: The CMA was constituted in January 1990 through the Capital Markets Authority Act. The following year the NSE was registered as a private company limited by shares. It also moved its business to a physical trading floor and adopted an open outcry system. Now the stockbrokers congregated on the trading floor to bid and sell shares.

1994-1999: The NSE changed to a company limited by guarantee. It also adopted a computerized clearing system. This facilitated faster payment and delivery of stock certificates to investors. By 1995 the total number of stockbrokers on the NSE was twenty. Important developments occurred in the years leading to the new century. The Investor Compensation Fund in 1995, the Association of Kenya Stock Brokers in 1997 and the Central Depository and settlement corporation limited (CDSC) in 1999.

2000-Present.

2000-2010: The CDSC began the operations of the central depository system in 2004. Investors could now operate electronic share accounts through their brokers or banks. They no longer had to trade through paper stock certificate forms. In 2006, NSE implemented its own automated trading systems, allowing for live trading.

The following year they launched a Wide Area Network (WAN) platform. This allowed for remote trading. Stockbrokers could now trade through their linked terminals in their offices. In 2009, they launched automated trading in government bonds.

2011- 2020: Changed name from Nairobi Stock Exchange to Nairobi Securities Exchange. This was in an effort to pave the way for the inclusion of a wider range of financial products. In 2012 achieved a system capable of facilitating online trading. In 2014, the CMA approved NSE’s demutualization and IPO.

The NSE Kenya is now a public company worth billions of Kenyan shillings. It has over sixty listed companies and over twenty trading participants. The NSE Kenya is also one of the largest stock exchange in Africa. It might not be at the level of the larger and more developed securities exchanges but is on the right track.

The Fintech industry is ever-evolving. Companies have to adapt to remain relevant and maintain their competitive advantage

Centum investments–A story of one man’s drive for excellence.

Centum is the leading investment company in Kenya. Its also listed on the NSE Kenya. It began as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation. In 2008, it rebranded into Centum Investment Company Limited. The government of Kenya is still a major shareholder through ICDC. But most of the shareholding is now under private ownership. The renowned Kenyan billionaire Chris Kirubi being the majority shareholder

In the same year, Dr James Mworia joined the company as its CEO at the young age of 30. He came in with a very ambitious plan. His goal was to grow Centum Investments several times over its progress in the past 50 years.

Under his leadership, the company embarked on an aggressive growth strategy. This has included:

Cutting Losses

2009 exit of its Rift valley railways investment with a 30% loss of initial investment value. Despite the loss, this was a timely exit which minimized potential losses. One trait of a great investor is the ability to take losses and get out of poor investments before they turn worse.

Real Estate Portfolio

The company has also built an extensive real estate portfolio. The most popular being the Two Rivers Development in Kiambu. This includes a shopping mall, residential apartments, hotels, commercial offices, and recreational facilities. One of the main challenges commercial property investors face is the decline in demand for commercial space.

So, Two Rivers Development achieving an occupancy of over eighty per cent has made it a worthy investment. Other notable real estate investments include the 10,254 acres Vipingo Development in Kilifi and 389 acres mixed-use Pearl Marina Development in Uganda.

Private Equity Portfolio

The firm has also had successful and profitable exits from some of its private equity investments which include Almasi Beverages, Nairobi Bottlers, and UAP.
It has also grown its private equity portfolio with the acquisition of Sidian Bank (formerly K-Rep Bank) and 17.8%% shareholding in Isuzu East Africa. Isuzu has a 38% market share of new vehicles in Kenya.

Centum assets under management (AUM) have grown from 8 billion to over 66 billion Kenyan shillings over the past decade. Dr Mworia has achieved his ambitious plan and then more over the past twelve years.

Conclusion

Companies are shutting down, and millions of people have lost their jobs. Many more are being forced to take unpaid leave or pay cuts. The coronavirus pandemic is causing an economic meltdown all over the world.

At such times it’s important for Kenyans to have faith and trust that they will overcome this pandemic. Kenyans are strong and capable of great feats. Tough times don’t last forever and great opportunities lie ahead for those who learn, adapt and innovate.

Ultimate Beginner’s Guide to Stock Market Capitalization (2020)

When I got started in stock trading, the learning curve was steep. Among the many concepts I had to learn, stock market capitalization, risk management, and others were high on the list. When I look back many of these concepts seem simple now, but as a novice trader/investor it’s easy to get overwhelmed. All the same, with time and commitment you can master any topic or skill.

So what is market capitalization?

Investopedia defines it as the total dollar market value of a company’s outstanding shares of stock. What are outstanding shares? How do you figure out their market value?

A few definitions:

Outstanding shares refer to a company’s stock held by all its shareholders.

Restricted shares refer to unregistered shares awarded to the company’s corporate officers. There are special Securities Exchange Commission regulations that govern their sale or transfer.

Share float refers to the company’s shares available for trading on the market. These shares can be transferred, sold and bought without any restrictions.

The Formula?

Market capitalization = current share price * outstanding shares.

Share float = outstanding shares – restricted shares

Tesla stock market capitalization (27th February 2020).

As of 27th February 2020, Tesla’s stock price was 778 (pre-market price rounded off). The company listed its outstanding shares at 183.78M and the share float 146.33M. This puts restricted shares at (183.78-146.33) 37.45M.

Using the market capitalization formula above 778×183.78=142.98B. This gives Tesla a stock market capitalization of $142.98B.

As the stock price fluctuates up or down every trading day, the market cap will fluctuate. This means that the stock price is the main factor that determines how much the market cap changes on a day-to-day basis.

The outstanding shares can also change and result in market cap changes. Though such changes are infrequent.

Below are examples of changes in Tesla’s number of outstanding shares.

Feb 2020- $2 billion common stock offering of 2.65 million shares.

May 2019- $750 million common stock offering of 3.1 million shares.

Coronavirus induced market-wide sell-off.

In the last few weeks, there has been a market-wide sell-off. This is because of the coronavirus pandemic that has hit the world hard. As a result, the most affected countries have shut down their borders. Many people are staying at home following government directives to self-quarantine. The sell-off has been drastic with all the stock market gains under three years of Trump’s presidency wiped out in less than a month. All the major U.S. indices, the Dow 30, S&P 500 and NASDAQ composite are all over 30% down from their February all-time highs. This has wiped out trillions of dollars of investors’ wealth.

Update* Tesla stock market capitalization (20th March 2020)

As of 20th March 2020, Tesla’s stock price was 427 (Friday closing price). The company listed its outstanding shares at 208.31M and the share float 146.07M.

This puts restricted shares at (208.31-146.07) 62.24M.

Using the market capitalization formula above 427×208.31=88.95B. This gives Tesla a stock market capitalization of $88.98B.

In less than a month, Tesla stock has shed $54B in market value.

You can easily track Tesla’s stock market capitalization and other companies on here

Different Categories of Market Capitalization.

Mega-cap– This category includes companies with a market cap of $200 billion and above. Examples are Amazon, Apple, and Microsoft, which all have achieved a trillion-dollar market cap at one point or another.

Large-cap– This category includes companies with a market cap that lies between $10 billion and $200 billion. Examples are Tesla, Boeing, McDonald’s, and eBay.

Mid-cap– This category is for companies with a market cap ranging between $2 billion to $10 billion. Examples are Kinross Gold, Dunkin Brands, Nordstrom, Harley-Davidson, and Macy’s Inc.

Small-cap-This category includes companies with a market cap that lies between $300 million and $2 billion. Examples are United States Steel, Bed Bath&Beyond, Office depot, Clovis, and Atlas Air.

Micro-cap– This category includes companies with a market cap ranging between $50 million to $300 million. Most of the penny stocks fall in this category. Examples are JC Penny, Akorn, Novavax, Noble Corp, and GameStop Corp.

Nano-cap– This category includes all companies with a market cap below $50 million. Examples are Yuma Energy Inc, DPW, Sellas Life Sciences, and Bio-Path Holdings.

Conclusion

It is important to equip yourself with the right knowledge and skills. This will increase your chances of success in the financial markets. The stock markets have been on a rough ride during the coronavirus pandemic. But at one point things will turn around and get better. Successful investors and traders are always prepared to tackle any challenge the market throws at them. To do this they ensure that they have access to the right tools at all times.

A great tool to empower you on your quest to conquer financial markets is Finviz Elite.

Its market-leading stock screener and back-testing technology will put you far ahead of the rest of the pack.

 

Six Huge Financial Market Losses After The U.S. Financial Crisis

The financial crisis of 2007/2008 shook the world to its core as it resulted in more than $10 trillion in lost wealth in the U.S. alone! In the following years, the U.S. economy slowly emerged out of the worst of the crisis and money started pouring back into financial markets. The race to the top was back. A lot of money has been made, however, some huge losses have been recorded too. Here is a list of some of the worst financial market losses in the last 10 years.

1. The London Whale

The London whale is a nickname that was given to Bruno Iksil a trader from the London branch of JPMorgan Chase & Co. It all began in February 2012 when Iksil started a series of credit default swaps (CDS) transactions in the derivatives market. As Iksil realized the market was moving against him, he engaged in more trades instead of unwinding the initial trades.

In prior similarly aggressive and risky trades Iksil had made some sizeable profits for JP Morgan This also resulted in sizeable losses for rivals on the other side of the trades. This angered them. Now they had the chance to get some revenge. Deducing that he lacked the liquidity to exit his positions, they traded against his positions. The news of these trades broke out and JP Morgan was accused of having poor risk management. The company closed all the trades. As a result, JP Morgan announced an estimated loss of $2 billion but it ended up amounting to more than $6 billion in losses and $920 million in fines.

2. The Valeant Big Mistake

Bill Ackman, an activist hedge fund investor, set his sight on Valeant Pharmaceuticals in 2014. The company’s business model and CEO Michael Pearson impressed him. He partnered with Valeant to push its bid for Allergan, a drug manufacturer. However, Allergan was against this acquisition. To counter the Valeant bid, Allergan made a deal with Actavis to buy the company instead of Valeant. Ackman fund’s held shares in Allergan so both ways he would benefit.

Ackman used the proceeds from the Allegan sale to invest in Valeant. That’s when things started going south. Within a few months of Ackman investing in Valeant, the company got into scandals. A lot of questions were being raised about Valeant’s practices from drug price manipulation to its accounting methods. The stock price crashed. The company’s board ousted the CEO, Michael. Some investors jumped ship and sold their shares, but Ackman stayed on, hoping for a turnaround. The turnaround never came. Two years later and almost $4 billion dollars in losses after selling Valeant shares, Ackman admitted that it was “one very big mistake”.

3. The We Work Failed IPO

A Japanese billionaire and founder of SoftBank, Masayoshi Son, is well known for his aggressive and high-risk investments in fast-growing technology-related startups. It’s late 2018, We Work was a rising star in the shared working space industry under the guidance of its founder Adam Neumann. In 2017 SoftBank had invested $4.4 billion in We Work at a valuation of $20 billion. This was a very large investment in a private company. Forward to 2018, SoftBank added another $4.25 billion into the company. Masayoshi agreed to a new valuation of $47 billion. But even with all these investments for SoftBank We Work was burning cash fast, spending $2.4 billion in the first six months of 2019.

We Work initial public offering (IPO) was coming up, and the company was aggressively marketing it to the public. However, worrying details about the company’s governance and culture were coming out. For example, Adam the CEO had charged the company nearly $6 million for the “We” trademark and hired close family members to senior management positions. Also, the valuation of $47 billion was too high for most investors. The company had no option but to shelve the IPO due to low interest from investors. SoftBank ended up having to lower the value of its investment in We Work by $4.6 billion as the company’s valuation sank from $47 billion to less than $8 billion.

4. The Bitcoin Bubble Burst

In the fall of 2017, Bitcoin price skyrocketed. In October Bitcoin’s price broke $5,000, rose to $10,000 in November and by December the price was nearing $20,000. It was a dream come true for bitcoin investors and speculators alike. The joy was short-lived for anyone who jumped in around the end of the year. Bitcoin crashed in 2018 and by April it was trading below $7,000 and by November it was down to $3,500. Since then, Bitcoin has not reclaimed its peak of $20,000.

Masayoshi Son, the Japanese billionaire, lost more than $130 million of his money after selling off his Bitcoin investment in 2018. He got in as Bitcoin was peaking in late 2017. He is just one example of the many Bitcoin losers. Its estimated U.S. investors lost more than $1.7 billion after selling their Bitcoins in 2018.

5. The Marijuana Craze

As Bitcoin was peaking towards the end of 2017, there was a new kid on the block. With the upcoming legalization of cannabis in Canada, investors were scrambling to get it as valuations of cannabis companies shot up. However, even after legalization, the industry was still facing a lot of challenges. These included weak supply chains, lack of financing and the fact that marijuana is still illegal at the federal level in the U.S. Most cannabis stock prices fell sharply in the early days of legalization and are yet to recover since then. Investors have lost billions of dollars across the cannabis industry.

In July 2018, Tilray a Canadian cannabis company priced its initial public offering (IPO) at $17 a share. Two months later, the stock had surged up to fifteen times the IPO price. Then it peaked at $300 per share and came crashing down. Since then the stock price has been on a downtrend and now back below the IPO price of $17. You have to feel sorry for anyone who bought the stock at $300 a share.

6. The Herbalife Short

In December 2012, Bill Ackman an activist hedge fund investor disclosed that his hedge fund, Pershing Square Capital Management had been shorting Herbalife stock for a few months to the tune of $1 billion. He released a research report that accused Herbalife’s multi marketing business structure of being a pyramid scheme. The company’s stock price fell following the report. A few months later, Ackman engaged in a heated argument with fellow billionaire investor Carl Icahn on live television. Carl called Ackman a liar and told him he would never invest with him even if he was the last man on Earth.

Soon afterward, Icahn started accumulating Herbalife’s stock. This resulted in the rise of Herbalife’s stock price putting Ackman’s short position in jeopardy. Ackman doubled his efforts, spending $50 million to promote his fund’s negative views on Herbalife. The more the company’s stock price fell, the more he stood to make. This did not happen. Five years down the line and Ackman finally exited the position, losing close to $1 billion.

Conclusion

The financial markets offer limitless opportunities to build wealth. However, the risks involved should not be ignored. As an investor learn from the experiences mentioned above and be prudent in your investment decisions. To get you started in the right direction, there are great resources such as The Motley Fool.