There are a growing number of opportunists who are clever enough to do the legal with an illegal twist. It is widely known that the Nairobi Stock Exchange is currently experiencing an economic bubble. Bugzzalot Amateur Business School is on the prowl for schemes to make money quickly before the bubble bursts. We turned to the history catalogues in the web infested mint machines of BABS and uncovered a get rich quick or burst scheme masking through the streets of Nairobi.

Just imagine being offered the opportunity to invest your cash and assured of a return double its amount in 42 days. In case you deposit over KSh. 5000, you are guaranteed to get double that amount in two months i.e. 65days. This money-luscious project is already underway in the streets and several people are eating off the cream. A pal invested KSh. 10000 and got back 12500 off the top in two months i.e 2.5 times the initial deposit. The owners of this business venture are very prominent personalities including former MP Joe Donde (unconfirmed). They have apparently refused to disclose the secret to their phenomenal growth. Currently, they are in the process of expanding to other areas like Thika township.

BABs of course can pick out a needle in a haystack. It is clear that if they are not involved in the drug trade then they must be on the NSE. In this era of IPOs, it is virtually a no-risk process to invest in stock if one has an inside man. The offerings will be sold at a low initial price then when trading opens on the stock exchange; the price will increase by about 10-20%, which is normal due to high demand. Our research included a case study of the Silicon Valley Economic Bubble of the US. This was aptly named due to the 1995-1999 period where IT based companies had public offerings for shares which nearly quadrupled in value within the initial trading day. During this ‘extra blue chip’ time, some people invested $250,000 and made a million within six months (proven fact). When the bubble finally burst thousands of these companies shut down. This left the clever opportunists dead broke.

The Professor-wannabes at BABS were curious about the time period of either 42 or 65 days in the get rich or burst scheme. Last year, there were several IPOs including Kengen, Equity Bank and Eveready, each just a few months apart. This year, more are bound to come leading to the rise of the Kenyan Silicon Valley.

 The recent debacle of the CFC Bank that recorded the highest ever share value in Kenya at KSh. 900 was just the beginning.  This increase of over KSh. 750 took place within a single trading day. Although the price closed at 368 shillings later due to the fear generated by its instability, the damage had been done. The meteoric rise had been caused by the announcement that CFC would merge with Stanbic Bank based in South Africa. Meanwhile, Stanbic Bank Uganda opened trading after their IPO at thrice the buying price of the initial shares. The highly anticipated but unconfirmed Safaricom IPO will definitely be over subscribed enough to cause a huge hold up of monies for other investments. If not well co-coordinated, the banking sector may be crippled for a few days. To curb hungry investors, BABS is sure that the shares will be sold at sky-high prices but this will not stop Kenyans (remember Mumias Sugar). Anyway, the get rich quick scheme is only bound to benefit from this thus the investors will see good returns because akina Donde must also have other investment portfolios.

The scheme must be illegal but the end justifies the means. After all, what does one stand to lose if you get back what you had initially put in. Try 1000 then see if it works. I can dare to live with that but any more and we may fight! Akina Donde must be getting more than enough to feed their extended family plus distant light-year away cousins. Normal commission for stock brokerage is about 2% but I think the clever guys must be getting multiple times over that. These Dondes might be trying to make a political comeback through this scheme. Its 2007 and it’s a rat race for the General Elections…

BE CAREFUL!

PS: The current streamlining of the insurance industry is bound to bring good tidings to investors.

Youth Enterprise Fund: How to make the KSH. 50,000 last long

BABS went to trail an entrepreneur who was frustrated by the recent move by the stakeholders of the fund to initially only dish out 50Gs to groups of 12. When one combines the Bible and the City Council there is bound to be a sin city in the offing. We came across this sole proprietor in Bugzzatopia who is in the process of devising a way to rip the most out of the Youth Fund. She did the mathematics of only 4G for each group member and found out that the cash would only be good for a night out in Westlands, Nairobi.

She presented us with a copy of 12 names while she worked in her small stall. She confessed that she is the 12^th disciple who will betray the others. The rest of the group members have no idea why she asked for their names. All of them are from Gishagi/Ocha/Ushago/Countryside and are used to lounging at Mama Pima’s chang’aa drinkers joint. If her scheme succeeds, our entrepreneur will buy all her soon to be fired members KSh. 1000 worth of chang’aa or kumi kumi to make sure that they either die or become blind for the rest of their lifetimes due to the deadman’s drinks. This will be the simple part of the plan; the rock and hard place trap will arise when the fund managers come knocking to ensure that her biz is legit.

The 23 year old will overcome this by showing them her biz certificate. Of course her biz had been registered 10 years ago. She had inherited it from her father as an only child. He had been killed while she was a teenager and her mother is currently at Lang’ata Prison for the murder. Her abusive dad could only manage to leave one positive legacy.  Her traumatic childhood had led her into a life based on a cloth of thinly laced trust and a hustling spirit. She had worked with several temporary employees so the over time she had upgraded her business into a company after conning one of the hundreds of corrupt City Council officials. This was done just in time before the announcement of the upcoming Youth Fund in 2005. Her list of 11 ghost workers will function similarly to the City Council payroll that has always featured retired and non-existent names.

When inspected the bia will obviously be there with only her and a few of her temporary workers. The training program for her ‘group’ will be the most difficult to evade but she will handle that when she gets there. The worst that could happen for lying to the government will be ending up in Lang’ata Prison where she will get to meet her mum. She might later use her cloth weaving skills to Prison Break out of jail after all, several cons in Kenya have leisurely walked out through holes in the wall, fallen prison trucks and unsecured law courts.

She has managed her small business to survive since she got her Voters’ Card. Although she has never voted, she hopes that the Youth Fund will lead to her success. She trusts none of her relatives. In fact, most of them alienated her due to the history of her kin but she has devised a way to milk the little cash from the Youth Fund cow.

I was informed that she is hopeful that her plan will work due to the bureaucracy that goes with such funds. Even up to this point, the government has not clearly spelt out the policy that will govern the fund. Nobody is sure whether individuals will be able to access the fund without having to go through the group stages. In an election year, as much as the government might deny it, the fund will be embroiled in politics otherwise it would have been introduced earlier. I am sure they will promise a new constitution if they win a second term!!!!