When one considers all the interactions and touchpoints with clients and shareholders, it is important to frame these in an ecosystem structure to ensure a consistent and excellent customer experience for all interactions and touchpoints.

In setting out to frame our customer ecosystem we had to consider the functionality needed from the interaction and touchpoint, for both clients, shareholders and ourselves,  as well as the ease of access or use of the interaction and touchpoint.  On this basis, we identified the following criteria for our customer ecosystem:

1.  Reach and Access

Clients and shareholders interact with us through various channels.  Our ecosystem needs to meet this functionality of multi-channel reach and access.

2. Integration

Since our customer ecosystem provides multi-channel access, it is important that the channels are integrated so that information shared with us and from us – to clients, shareholders and stakeholders – is centralized and with a holistic view , thus ensuring efficiencies and comprehensiveness of responses. 

3. Escalation

As much as possible, our customer ecosystem needs to  screen for potential problematic issues and initiate an escalation process.  The parameters of our ecosystem are set up to do this.

4. Community and social interactions/feedback

We want to engage with, and receive feedback from our community of clients, shareholders and stakeholders.   

We therefore provide and manage as many client and shareholder interactions through data portals or a centralized CRM to  efficiently capture all the touch points.

1. All correspondence (emails, letters) are ticketed in our CRM system for a holistic shareholder profile.  Shareholders who correspond by email receive a reference ticket number shared by return email. 
2. All telephone calls from call out exercises are recorded and uploaded to create a ticket in our CRM for that interaction.

3. Walk-in interactions at our offices are received on our Queue Management System and ticketed in our CRM.
4. Mobile money opt-in interactions through our general USSD number are integrated with our CRM system.
5. We share information with shareholders at various stages of their tickets processing for visibility and confirmation of their transaction requests.
6. We provide information with stakeholders, including brokers, on their open tickets and the status of their processing, for ease of monitoring and feedback to shareholders.
7. Our CRM provides a knowledge base center functionality, to mirror the information and processing forms available on our website.
8. We actively provide information and engage with our community using social media channels.  We have conducted research through our social media channels resulting in new product development research and deployment.  Our main CSR application, created to improve financial literacy and skills around capital markets investing was developed based on our social media research into stock market investing in Kenya.  https://candrgroup.co.ke/2018/09/07/shareholders-seek-financial-freedom-in-stocks/ 

Investing in Our People

Our commitment to transforming customer satisfaction begins with an exceptional and committed team. With a wealth of experience in the share registry industry, we prioritize investing in our staff’s development. Through regular training, team-building activities, and a supportive culture, we foster collaboration, initiative, and accountability. This investment is reflected in our service excellence and the quality of our work. By nurturing a cohesive team dynamic and aligning with C&R Group’s goals and innovations, we not only support each other but also our clients and stakeholders in the wider  capital markets community.

Efficient Dividend Processing for Enhanced Satisfaction

Timely dividend payments are crucial for shareholder satisfaction, and at C&R Group, we understand this implicitly.   We offer “end-to-end” dividend processing and reconciliation management services that allows for ease of bulk dividend processing for our clients.  We further provide updated reconciliation of uncleared funds in dividend bank accounts linked 1:1 to shareholder’s outstanding dividends, thereby allowing for transparency oversight by our clients.

Our unparalleled  dividends reconciliation processes allow for efficient and comprehensive responses to shareholders or regulators on dividend payment queries.  We are able to provide dividend payment histories for each shareholder for each dividend payout we manage.

And we are not stopping there – while we have started a strong customer eco-system to transform customer experiences, we see this as an ongoing journey.  There will always be ongoing monitoring, optimization and roll out of new features to ensure a transformed and satisfying customer experience for our clients, shareholders and our wider community.   We already have new features and functionalities under development.  Stay tuned for this roll out.

C&R GROUP

May 2024

Dividends are known as one of the ways investors earn a return from investing in stocks. Dividends are regular payments of profit made to investors who own a company’s stock. Companies pay dividends to reward shareholders for their investments and continued support, and to investors dividend payouts are often seen as a sign of a company’s financial health and management’s confidence in future cash flow. Dividends can also communicate a positive message to investors who perceive a long-term dividend as a sign of corporate maturity and strength. Not all company however pay dividends but where companies do not pay dividends there is usually communications on the reasons so as to avert investor loss of confidence in the company.

Top tier banks in Kenya listed at the Nairobi Securities Exchange (NSE) announced commendable dividends from their 2022 financial results and shareholders of these public listed banks are expecting good returns on their investment, as we can see below: –

These payouts can be a good source of passive income, but there is more to these dividends than just cash in your pocket. When a shareholder elects to reinvest the dividends, the money from the dividend payment is used to purchase more shares in the same company. The process of reinvesting dividends is quite simple and an investor can opt to do this manually as part of their investment strategy.

Before we continue to the pros and cons of dividend reinvestment, here is an example of dividend reinvestment for ABSA Bank Kenya PLC for the last 5 years where an investor with a shareholding of 1,000 shares has been ploughing back the dividend payout to buy more shares. We have analyzed the value of shares over the 5-year time period with & without reinvesting the dividends paid for example purposes.

**This is an example only, dividends from shares are not guaranteed and the value of shares can go up or down due to market effects. These calculations do not account for charges or taxes. This Information purposes only and is not to be taken as a specific stock recommendation.

The question every investor should ask is whether to take the cash dividend or reinvest their dividends in the same company or buy shares in another company . Some of the notable advantages of dividend reinvestment includes:

1. You get more shares of a stock on a regular basis without further spending, as you are using passive income already earned on your investment.
2. If you reinvest dividends, you can supercharge your long-term returns because of the power of compounding. Your dividends buy more shares, which increases your dividend payout the next time, which lets you buy even more shares, and so on.
3. When you reinvest your dividends, you are taking advantage of a powerful investment strategy called dollar-cost averaging. By consistently reinvesting, you purchase more shares when prices are low and fewer when prices are high. This smooths out the cost of your investments over time, reducing the impact of market volatility on your portfolio.
4. It offers the ability to grow your wealth quietly and steadily.
5. Reinvesting dividends encourages discipline in your investment strategy. By consistently reinvesting, you create a habit of thinking long-term and focusing on growth rather than immediate gains. This disciplined approach can help you stay the course during market fluctuations and keep you on track to achieve your financial goals.

If you examine your returns 10 or 20 years later, reinvesting is more likely to increase the value of your investment than simply taking the cash. This is because dividend reinvestment boosts the annualized returns of a portfolio and those returns compound over time.

Every coin has two sides and to point out the reasons why you should not reinvest your dividends, you should consider: when you need the money to supplement your current income; when the stock is under performing then you should take the cash.

Banks will start paying dividends as from the 25^th May, 2023. Reach out to us and take advantage to opt in to receive your money by Mpesa, thus ensuring you promptly receive your dividends and are able to make quick reinvestment decision.

Alternatively, dial *483*038# to opt in for Mpesa dividend payment mode and instantly receive your dividend payment via Mpesa on every payment date.

One consideration was shareholder interactions. Shareholders interact through many touch-points – email, telephone, social media, walk-ins and for accountability and tracking purposes all these interactions need to be accounted for in our records.  C&R uses a comprehensive CRM system that provides a centralized, 360^o view for shareholder interactions therefore allowing for more efficiency and speed in responding and resolving shareholder queries or requests.

Continuous tech innovation and a focus on process transformation for efficiency and better user experience or participation sparked the idea of developing C&R Digital, a cloud based integrated platform for both shareholder and client online services.  The platform houses C&R’s Virtual AGM Portal, C&R’s Client Reporting Portal as well as C&R’s Online IPO/ Bond Application and Processing Portal.

The idea for C&R’s Virtual AGM system started in 2018 coming out of data analysis on shareholders’ representation in AGM’s.  Our data analytics indicated that there was missing representation for the middle tier shareholders at AGMs and we considered the reasons why this group were not represented despite having significant investments.  We identified the main factors as time (busy professionals) and cost value (geographic distance) challenges so we considered how we could facilitate increased participation in AGMs in an efficient way with minimal time and cost outputs. This led to research into hybrid AGMs as a service solution and the start of developing our Virtual AGM system.

C&R’s Virtual AGM system is a fully integrated USSD and Web platform where shareholders can access and interact with the system from either access mode with all interactions – attendance, voting and questions – fully facilitated through one centralized portal with integrated reporting.  Any virtual AGM system also has to allow for the same functionality and security as provided at physical AGMs e.g. attendance verification, one vote per shareholder per resolution, proposals and secondments of voting resolutions, and functionality for live questions.  With C&R’s AGM platform, shareholders can access the event at any time on Web or USSD and thereafter view AGM information- AGM Notice, Minutes of the previous meeting, Voting Resolutions, etc – and participate fully in voting and asking questions in written/text format (pre and/or during the AGM event) or live integration from the virtual AGM Meeting Room (during the AGM event).  The system equally considers client experience and has centralized client reporting for three key reports of Attendance, Q&A and Voting/Elections, which are real time, fully integrated reports with either a Summary view or a Detailed view.

As we considered other processes/services that could be digitized for better efficiency and user experiences the idea of a digital service platform evolved.  In addition to the Virtual AGM system, C&R Digital also houses an Online Client Reporting Portal and an online IPO/Bond Processing system.

Customer support is one of the key business functions that speaks to innovative, digital solutions.   On our Online Client Reporting Portal we are able to provide our monthly reports to clients in one easily accessible location where previous reports are stored for ease of reference.  The portal allows for interactive data reporting as there is a comprehensive data base supporting the digital reports.

Similarly, when we considered ease of participating in IPOs/Bonds or Rights Issue we noted that the traditional physical processes limit wide and robust participation.  This gap created another opportunity for transformational processes leading to the development of our Online IPO/Rights Issue and Bond Application and Processing Portal which allows for the online application, reconciliation and allotment of IPO/Bond or Rights Issue where different parties log-in and process using the centralized system.  Applicants/ Brokers/ Agents/ Transaction Advisors and Clients can all log in and access their required functionality such as applications, submission of payment details, verification of payment, confirmation of approved applications and reports access in real time directly from the online system.

With a focus on innovation and being pro-active for finding solutions to industry challenges, we are not only living our core competence of innovation but we are also bringing  new techniques, procedures and processes to contribute towards industry development and growth of the East African Capital Markets.

C&R Group offers shareholder management services in Kenya and Uganda including Share Registrar Services, Dividend Payment and Reconciliation services, Physical & Virtual AGM Management services, and UFAA Advisory services. Let us collaborate to grow your business further through our solutions.

]]> https://candrgroup.co.ke/2021/09/07/centennials-about-to-join-the-job-market/ Tue, 07 Sep 2021 05:40:52 +0000 https://candrgroup.co.ke/?p=2539 Read More]]> Centennials,also known as Generation Z,have been defined as the generation that grew up with a smartphone in their hand.  Centennials were born between the years of 1997 to 2012 (age rate 9-24 years) and are known as the children of the internet age.  This is the generation that knew social networks when they were children and now their main way of communication is real time messaging. Facebook, Instagram, Twitter, My Space and many more sites sprung in their era. It is estimated that around 4.4billion people in the world are below the age of 35 years.2 billion are millennials while 2.4 billion are centennials or Generation Z.

The generations defined:-

Source: https://www.pewresearch.org/

A significant proportion of Centennials will be joining the job market as early as in the coming year.  The big question is are companies ready for this generation? It is estimated that these younglings,many of whom are still minors, check their phones over 150x a day, send over 50 billion instant messages and send out over 6billion emojis daily. What companies’ executives need to know is that Centennials want to be recognized for their creativity and vibrancy and thus have a very different outlook more than the earlier generations.When the world’s economy crashed in 2008, the oldest Centennials were just preteen, an age where they understood and observed the great hardships their families and their friends’ families went through,with loss of jobs and the change of lifestyle from affluent to poverty. This generation also had traumatic experiences of the rise in terrorism acts during their adolescence and early adulthood. This is the generation that embraced activism for political fairness and equity, climate change, equal rights for women, the LGBTQ community and people of colour (POC).

Centennials have a drive to defy status quo and make an impact.  The challenge as they enter the workforce will be how to communicate and connect with them as this is a generation that is very interested in “changing the wheel”. This is a generation that wants to achieve maximum growth and quick returns, and are not interested in conventional timeline.  It is important that companies try and tap into their mindset by inviting them for collaborative work, relaxing of work hierarchies and opening opportunities for creative thinking on the job.  Great ideas from them will definitely ensure they push the companies to the next step.

This generation, the “connected generation” or “dot com kids” have lived and breathed technology their whole lives.   They will expect companies to be more innovative and they will strive to get digital experience from existing products and services.Companies need to offer convenience and connectivity at the heart of their products and services to resonate with this generation.  Centennials are not interested in gimmicks.  Being authentic in your company’s products and services will ensure that Generation Z will be your customers.

Community is important to Centennials.  To resonate with this generation, companies need to show community inclusiveness through embracing diversity in their policies, products and advertising.   Centennials value community views and opinions. They will read reviews and community discussions before they make any purchases.  Companies need to offer transparency in company and product reviews- whether social media discussions or product reviews – to connect with this generation.  And if not provided, Centennials will seek and find this information and share it themselves.  Companies cannot hide with the generation.  Where there are any errors or faults, companies need to be transparent, manage their public response and then act on it.  It is a new ball game with Centennials.

Centennials are complex.   They are making strides in years, where their parents took decades, even a life time.  They are technological geniuses but not necessarily financially literate for their rapid achievements.  They knew how to operate Alexa as toddlers but will still struggle with issues that are not defined by technology, but by life experiences and time.  Issues such as life goals and financial literacy.  They have had to mature faster than their parents but are not necessarily yet mature.  Centennials are complex but they represent the future – the future of the workplace, the future of consumers.  Companies need to connect with them and their values.

What comes after Generation Z? These newest arrivals are at times being referred to as Generation Alpha. This is the generation that will never know a world without smartphones.  Being called the glass generation will suit them fine.

Irene Mugua

Senior, Business Development Supervisor

A share buyback also known as share repurchase usually involves the company’s management buying back part of the shares they had previously sold to the public. The company by buying back the shares eliminates them from the market thus ensuring there are fewer shares of the company in circulation. The company records the buyback shares as treasury stock (shares with no voting power kept by the company and not available to the public)in their financial statements.Popularity of share buybacks in the developed markets is evident, as far back as 1999 over 1,200 companies listed on the New York Stock Exchange repurchased their own shares that year. Here in Kenya the Companies Act, 2015 introduced the concept of share buybacks and it is well detailed in section 447 part XVI.Nation Media Group the largest Media House in East Africa is the first company in the Kenyan Bourse to issue a buyback.

A stock repurchase is a win-win situation for both companies and shareholders, as during a share buyback the company reduces the stock supply thus preventing its value from declining. For example, if company X has 1000 issued and paid up shares and a shareholder has 100 shares, his or her stake in Company Xis 10 percent (i.e.100/1000 = 10%). If the company through a share buyback buys 100 shares and redeems/eliminates them, 900 shares will remain in circulation. The shareholder’s participation will become 11 percent of the company (i.e.100/900 = 11%). An increase of 1%.

Managing the shares value further leads to an improvement in the company’s Earnings per Share (EPS) which is a good indication of the company’s profitability and this in the long run boosts its share price. Companies’ management use share buyback to express their confidence in their company and send out a clear message that the stock is undervalued.To incentivize shareholders the Company will offer a strong price for its shares therefore presenting an attractive offer for those shareholders who are interested in taking up gains on the share price as opposed to a long term hold.

The NSE 20 share index, which is one of the longest standing benchmark index used at the Nairobi Securities Exchange show the Kenyan Stock market, has been on a decline for the last five years as shown on the graph below. The NSE 20 share index has shed over 50% from4,007.33 points on 4^th January, 2016 to the current figures of 1,975.02points as at 10^th August 2021.The market hit its lowest of1,723.96 points on 21^st August, 2020during the period of the second wave of Covid-19 pandemic in the country.

The graph below shows a five year NSE 20 share Index trend from 2016 to the current figures.  The NSE 20 share index is calculated on a daily basis on 20 blue chip companies against; the company’s market capitalization, volume of shares traded, liquidity levels and the turnover. Thus this trend shows even blue chip companies lost their share prices as the market went down, leading to most of them being undervalued.

Source: NSE

On 31^st May 2021, Nation Media Group (NMG) issued a share buyback circular to shareholders, proposing a buyback of up to 10% of its issued and paid-up share capital (20.7 million shares). Currently the issued and paid up shares are 207.4 million shares and the buyback will reduce issued and paid up shares to 186.7 Million shares. The company started buying back the shares on 28^th June, 2021 where NMG investors have a grand chance of cashing in on their investments at a price of Kes. 25 per share. Before the announcement of the buyback the price of NMG was trading at Kes.17.25 as at 28^th April, 2021, the buyback shares of Kes. 25 was therefore a 45% increase on the share price. The company has traded over 16 million shares at an average price of Kes 25 since the opening of the cashback on 28^th June, 2021.  The buyback will close at the attainment of the 10% buyback or on Friday, 24^thSeptember, 2021.

Source: NSE

Studies show that one of the main drivers of share buybacks is positive sentiment on a company’s financial performance. Tech heavyweight Apple recently approved a share buyback repurchase of an additional $90 billion and other international companies are also seeking buybacks as they are optimistic about their near-term prospects as the economy at large continues to open up amid rapid vaccinations. The stock market has undergone volatility and inflation remains a major worry but companies like Nation Media Group Plc are seeking to change the ball game and be proactive about managing their shares value.This type of proactive management can only have a positive effect on the market.

Irene Mugua

Senior, Business Development Supervisor

]]> https://candrgroup.co.ke/2021/04/10/demystifying-beneficial-ownership-under-the-kenyan-company-law-framework/ Sat, 10 Apr 2021 20:43:10 +0000 http://xtratheme.comconstruction/?p=140 Read More]]> The momentum for beneficial ownership can be traced to a meeting held in the month of June, 2013 by leaders from the Group of Eight (G8) Industrialized Nations in Northern Ireland. This brief article attempts to highlight the beneficial ownership legislation in Kenya and the challenges encountered in implementing the same.
Read more on the link below.
Demystifying Beneficial Ownership Under the Kenyan Company Law Framework

At C&R Group, technology, innovation and adoption have always been a critical core value for our strategy. We believe that technology creates the platform to innovate and provide us with an edge to meet ever evolving industry needs. For this reason, we have been the first in many technology innovations in the capital market industry. Let us take a look at some of our key systems that has transformed the way we conduct business in the market and has helped us make a difference to our clients:

C&R Digital Platform

C&R Digital is our proprietary digital platform that provides shareholders’ with access to online services including Virtual Annual General Meeting (“AGM”) services and market information.

C&R’s Virtual AGM System is one of the products under the C&R Digital Platform.  The Virtual AGM System enables a company to hold either fully virtual or hybrid, combined physical and virtual, access to a meeting. Shareholders/members are able to ask questions and vote on resolutions on the system. The Virtual AGM is either a videographed live event or a virtual meeting that is live streamed to shareholders/members accessing the Virtual AGM system on C&R Digital Platform. Shareholders can then access the Virtual AGM System from the comfort of their home/office through online access via computer, smartphone, tablet or USSD access via feature phone. In 2019 we conducted the 1^st Hybrid AGM (both in person and virtual) for a Public Listed Company in Africa. Value added services

Amid major global disruption brought about by COVID-19, the way forward was for companies to either delay their AGM’s, and therefore delay critical shareholder interactions, or adopt digitization and hold Virtual AGM’s.  At C&R Group our previous experience with holding a hybrid AGM and our significant investment in technology, gave us the platform to be able to execute fully virtual AGM’s. In the year 2020, we witnessed an increase in partnerships, with over 20 Companies opting for our virtual meeting services to meet their customer demands. List of clients

Mobile payment of dividends

Cheques, EFT and Swift have been used as means of payment for a long time, therefore people have built trust with these modes of payments.  However, while EFTs and SWIFT dividend payment modes are bank to bank transfers and very efficient, payment by cheques  has many gaps as an efficient payment mode.For example, for a shareholder to receive dividends by cheque, a cheque has to be sent to the respective shareholder’s postal address,. The entire process can take a week or more before the shareholder receives the cheque, let alone cashing it.  Shareholders also tend not to update their postal address e.g. a shareholder was using a work post box and left the company and did not provide new details or a shareholder has not updated postal details on the register with appropriate postal code. As a result the shareholder’s cheque has a high probability of not reaching the shareholder.  Adopting mobile money payment, C&R’s M-Mgao^TM payment mode, provides an alternate option for shareholders who traditionally receive their dividends through cheques.  Mobile money payment mode provides safety and convenience to shareholders, who can opt-in through a USSD shortcode *483*038# to register for mobile money payment. This payment method has proven to be safer, more convenient and have assisted our customers in accessing services seamlessly. Financial Services

Digital Bond/Right Issue

C&R Group has undertaken many projects during its existence including IPO’s, Rights Issues and Bond Issues.  With these transactions, the length of time needed to complete the physical application process, the complexity of the transaction structure, and the presentation of physical documents required for the process to be completed can sometimes be quite involving.

C&R is always looking at technological disruptions to increase efficiencies in our capital markets.  In two recent Rights and Bonds Issues, C&R introduced a technology platform for online applications processing to address a key challenge for these issues, which is receiving the applications in a timely basis to allow for processing. In the online application technology platform the investor first creates a unique account on the platform, and then uses that account to apply for and confirm payment for the corporate issue.  The platform can be accessed individually by investor log-ins on the portal, or through the branch network of an institution.  This has reduced the time taken by investors to submit applications and provides visibility to both the broker and the data processor about submitted applications.   As a Bond Paying Agent and Share Register, this technology has been instrumental to investors who were able to seamlessly and successfully transact without necessarily having to physically present required application documents. We managed and processed Centum Re digital Bond and also managed and processed Credit Bank’s Right Issue using the online application process. Project undertaken

Electronic document management

C&R uses a CRM system with fully integrated scanning processes.  We have also had to create a digital inventory (scanning and indexing) of historical documents used for shareholder verification.  We have expanded this experience gained internally to a commercial service.  C&R’s document management division offers services around the conversion of physical records to electronic digital repository, therefore creating efficiency in cost of space and access to information. Value added services

These three technological transformations have disrupted the market with improved efficiencies and helped our clients achieve phenomenal results and overcome challenges brought about by an ever changing business environment.

Kwach Oluoko

Manager, Business Development

All games have a learning aspect to it; Call of Duty and Pacman which are action games teaches the player on Resource planning, adventure games like King’s Quest will train the player on problem solving mechanisms and thought relationships. Simulation games like the flight simulator helps the player improve their skills in observation of the different interactions and their results, fighting and sports games like FIFA Soccer Saga educates players on teamwork, hand- eye coordination and reflexes. Video games have always had educational value built in as any of them will promote strategic thinking and expand problem solving skills.

Games present a variety of sensory experiences thus ensuring the brain is well engaged, while also enhancing memories and therefore learning. Educational Games builds on this gaming benefit to develop interactive games that impart knowledge, inform, train or quiz users while playing. Edu games therefore offer the player more than pure entertainment as the player enjoys the fun element and practical aspect at the same time. A successful educational game will have well thought out gaming, learning and technical aspects.

Educational games are applied in different fields like education, health, defense, finance, research and training and is continuously expanding as technology develops. Edu games, as is typical of other games, must ensure to engage players by having an element of conflict, which is well described and defined and which demands the intervention of the players as they are guided by the games goals and rules. Short feedback cycles ensure the action by players is immediately felt. The entertainment aspect is also crucial as they also offer a challenging aspect for the players.  A successful Edu Game has to have game appeal and depth while striking a balance between not being overly complicated but at the same time complex enough to hold the player’s attention.

Game play and Game flow are the critical components of Edu games. The game play has to be well defined by having a clear set of rules and objectives that will guide the players with command methods that will outline how the game will be played. The environment of the game world needs to hold the players interest. A timeframe, even though temporary, ensures the players have a time limit and lastly, just like a good story, the game plot must develop as the players play.

The game flow is the state players enter into when completely absorbed by the current activity of playing the game. An Edu Game’s flow must provide a realistic feel, clearly defined objective and continuous feedback to make the player fully engaged in gaining and mastering various skills levels of the game Another method of Edu Games to engage players is making sure the game offers a reward system and to promote competition and collaboration with peers when needed.

We can all admit, “Knowledge is learning and skill is the application of the knowledge”. Educational games provide a unique experience that promotes the essential gratification of the players as it keeps them engaged and motivated. As players strive for continuous improvement in the game, the game should on the other hand offer difficult challenges to them allowing for progressive attainment of knowledge.

Irene Mugua

Business Development Supervisor

For listed companies, a fundamental activity is an Annual General meeting.   Traditionally, apart from AGM’s being a regulatory requirement, they are also the main event by which companies engage with their shareholders, and for companies to obtain necessary shareholder approvals on voting resolutions.  With the many restrictions on public gatherings to minimize the spread of COVID-19, traditional ways of holding AGM’s was not possible.  Companies increasingly had to look at digitization to assist virtual ways of meeting and working, including e-learning and e-health.

Digitalization is defined as, “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner, Inc. Professor Bitange Ndemo in one of his recent articles in the local dailies questioned our readiness in the global reset? He stated, “Digitalization has changed the rules of success and only those that embrace it will harvest its fruits”.

C&R Group has long adopted technology as a key enabling factor for service delivery.  As far back as 2017, C&R had started developing its digital platform as a parallel service channel to physical service channels for share registry.  Virtual AGM’s is one of the services on the C&R Digital platform.  Before COVID-19, C&R Group was evaluating hybrid AGM’s as a way of including shareholders who are typically not available for physical AGM’s but whose impact can be felt when companies require market  buy-in for corporate activities.https://candrgroup.co.ke/publication/the-missing-shareholder-an-analysis-of-the-lack-of-shareholder-representation-in-annual-general-meetings-agm/. With this end in mind, in 2019 we delivered the 1^st Hybrid AGM (both in person and virtual) for a Public Listed Company in Africa https://candrgroup.co.ke/publication/cr-group-delivers-the-1st-hybrid-agm-in-africa-through-sharehub/.

Fast forward to the beginning of the 2020 AGM period, typically around May of each calendar year, and the recent Governmental declaration in March of COVID-19 as a national pandemic.  The way forward was for companies to either delay their AGM’s, and therefore delay critical shareholder interactions, or adopt digitization and hold Virtual AGM’s.  At C&R Group our previous experience with holding a hybrid AGM and our significant investment in technology, gave us the platform to be able to execute fully virtual AGM’s.

As market leaders we consider it a responsibility to partner with the regulators and our clients in steering the industry to higher levels of digitalization. In light of this, we would like to share the following tips on running a successful virtual AGM;

COMPLIANCY– the company must obey the mandates set by the relevant regulatory authority that governs them. The Capital Markets Authority (CMA) in Kenya granted public companies approval to hold virtual general meetings after a court order issued by the High Court of Kenya in Miscellaneous Application  No.  E680 of 2020 on Wednesday 29^th April 2020. This court order ensured that companies listed in the NSE were compliant to hold online Annual General Meetings.  Many companies have used the opportunity to pass critical resolutions to amend Articles of Association to allow for electronic meetings and communications in the future.

THE RIGHT PLATFORM- In a physical AGM, there is necessary vetting of eligible shareholders before participation.  Virtual AGM’s must have the same functionality to vet and ensure that only valid shareholders register vote and ask questions.  Necessary functionality include  shareholder/member registration, attendance tracking capability, voting and polling ability, shareholder/ member communications portal, a question and answer function that enables full participation and lastly a live- streaming broadcast functionality.

PREPARATION- Physical AGM’s are a one day event, which requires the commitment of set committees or departments and months of preparation to ensure the day’s success. Virtual AGM’s are no different and they require the same level of preparedness. We advise having a rehearsal AGM with the Board Chair, CEO, Company Secretary, Auditors, CFO and board members and any senior executives that will play a role or have a presentation during the AGM before the actual AGM day.

COMMUNICATION- To ensure transparency, we highly recommend that AGM notices have an explanation to the members, on the protocols for the company’s virtual AGM, whether provided for by the company’s articles of association or provided for by regulatory directives.  Proxies are a key representative for some shareholders and a proper and clear guideline on shareholder/member/proxy registration should be provided. It is also important to ensure that all meeting materials are readily available in the company’s website as well as the results of any voting or responses to questions.

The Annual General meeting is a network for shareholders to interact with their directors and management in a productive way and share constructive market and management feedback, concerns and ideas. C&R Group’s (https://digital.candrgroup.co.ke/) online platform is an innovative and robust system which offers full virtual AGM functionality, providing a unique virtual experience for both the shareholder and the company.

The tips highlighted are only the tip of the ice berg; there are more factors that will ensure the success of your AGM. Get in touch with us (Call: +254 020 760 8216 Email: bd@candrgroup.co.ke) and experience our expertise in managing your virtual Annual General Meeting (AGM).

Irene Mugua – Business Development Supervisor

C&R Group

2020 has been the year riddled with an unexpected pandemic that is Covid-19. Whereas past empirical research has shown that stock markets readjusts for normal market macroeconomic forces, a pandemic like this one, which shocked the whole world, has led to a baffled capital markets environment.

Prior to the pandemic of 2020, Kenya was ranked at position 61 in the ease of doing business category, out of 190 participating economies, according to the World Bank Group’s Doing Business Report, 2019. The 2019 assessment was a steady improvement from 92 in 2017 and 80 in 2018 and a clear indicator of a better business environment by the Government.  This was also evidenced by the high foreign activity at the Nairobi Securities Exchange (NSE).

Data Source: WHO

The NSE 20 share index which is one of the longest standing benchmark index used at the Nairobi Securities Exchange is calculated as a mean of the top 20 best performing counters. This is calculated on a daily basis on the 20 companies’; market capitalization, volume of shares traded, liquidity levels and the turnover.

The Kenyan Government publicly announced the country’s first Covid-19 case on 13^th March 2020, the same day the NSE 20 share index was at 2124.78.

Data Source: WHO figures, NSE

As indicated by the graph above, the NSE 20 share index decreased by 17% from the day the first case was reported to its current position of 1756.90 as the Covid-19 cases continued to rise.

We have seen similar slumps in the past due to different factors. The Oil crisis of the 70s saw the NSE halt in 1972 due to depressed share prices. The introduction of 35% capital gains tax in 1975 also saw a slump in the NSE. In addition to that, the volatile environment after the 2008 elections caused the stock market to decline.

With this context in mind, it begs the question: What informs investors’ decision to buy or sell their shares particularly in situations of major market factions? Behavioral finance holds the view that in practice, markets are far from perfect and investors are not rational. Investors often let emotions overrule rational analysis. This is a major reason for the huge volumes sold during volatile periods, such as a pandemic, election years and recessions, occasioned by low confidence in the economy.  While some investors do panic selling, other investors take the opportunity to buy for long term hold.

The 2021 forecast on the market is majorly influenced by the containment of the Covid-19 virus, along with the discovery of a vaccine.  However, we are seeing recovery of stocks in certain industries such as banking.  Despite any recoveries, we can expect companies to  continue to focus on stability over profitability during this period. This therefore means that, as witnessed in 2020, companies may not issue dividends to shareholders. This may lead investors to do panic selling or quick selling to recover money, due to income loss occasioned by the effects of the pandemic.  Therefore, for savvy investors, it is the right time to assess stock fundamentals and buy stocks.

The stock market is not for the faint hearted, knowing the survival tricks is key read our article to gain more tips on trading. http://candrgroup.co.ke/publication/seven-secrets-to-share-trading-in-kenya/

Lilian Muringo,

Business Development