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Wednesday 30th of March 2016
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Morning Africa |
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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.
The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke
Macro Thoughts
Given the risks to the outlook, I consider it appropriate for the
Committee to proceed cautiously in adjusting policy. This caution is
especially warranted because, with the federal funds rate so low, the
FOMC's ability to use conventional monetary policy to respond to
economic disturbances is asymmetric. If economic conditions were to
strengthen considerably more than currently expected, the FOMC could
readily raise its target range for the federal funds rate to stabilize
the economy. By contrast, if the expansion was to falter or if
inflation was to remain stubbornly low, the FOMC would be able to
provide only a modest degree of additional stimulus by cutting the
federal funds rate back to near zero
Conclusions
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Ngugi wa Thiong'o' story The Upright Revolution Africa |
“The moment we lost our languages was also the moment we lost our
bodies, our gold, diamonds, copper, coffee, tea. The moment we
accepted (or being made to accept) that we could not do things with
our languages was the moment we accepted that we could not make things
with our vast resources,” said the novelist and playwright.
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Ngugi Wa Thiongo's Dreams in a Time of a War Africa |
Years later when I read T.S. Eliot's line that April was the cruellest
month, I would recall what happened to me one April Day in 1954, in
chilly Limuru, the prime Estate of what, in 1902, another Eliot, Sir
Charles Eliot, then Governor of colonial Kenya, had set aside as White
Highlands. The Day came back to me, the now of it, vividly.
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T.S. Eliot The Waste Land Africa |
APRIL is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.
Winter kept us warm, covering
Earth in forgetful snow, feeding
A little life with dried tubers.
Summer surprised us, coming over the Starnbergersee
With a shower of rain; we stopped in the colonnade,
And went on in sunlight, into the Hofgarten, 10
And drank coffee, and talked for an hour.
Bin gar keine Russin, stamm’ aus Litauen, echt deutsch.
And when we were children, staying at the archduke’s,
My cousin’s, he took me out on a sled,
And I was frightened. He said, Marie,
Marie, hold on tight. And down we went.
In the mountains, there you feel free.
I read, much of the night, and go south in the winter.
“My nerves are bad to-night. Yes, bad. Stay with me.
Speak to me. Why do you never speak? Speak.
What are you thinking of? What thinking? What?
I never know what you are thinking. Think.”
I think we are in rats’ alley 115
Where the dead men lost their bones.
“What is that noise?”
The wind under the door.
“What is that noise now? What is the wind doing?”
Nothing again nothing. 120
“Do
You know nothing? Do you see nothing? Do you remember
Nothing?”
I remember
Those are pearls that were his eyes. 125
“Are you alive, or not? Is there nothing in your head?”
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Turkey 'demands deletion' of German video mocking Erdoğan Guardian Law & Politics |
The complaints from Turkey centre on a two-minute satirical song
called Erdowie, Erdowo, Erdoğan. Photograph: AP
The Turkish government has reportedly ordered the deletion from the
internet of a German satirical video that pokes fun at President Recep
Tayipp Erdoğan and condemns his human rights record.
Germany’s ambassador to Turkey, Martin Erdmann, was summoned to the
foreign ministry in Ankara last week, according to German media, and
asked to justify the contents of the short film made by Extra 3, the
popular satirical television programme.
“We demanded that the programme be deleted,” a Turkish diplomat told
Agence France-Presse on condition of anonymity. |
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29-MAR-2016 Countries Pay Heavy Price for Less Costly Terror Attack @TheStarKenya Law & Politics |
The Bombings at Brussels Airport and the Maelbeek metro attack brought
Terror back with full force onto our screens. I extend my deepest
condolences to the Kingdom of Belgium, The Minister of Foreign Affairs
Didier Reynders [who was a gracious Guest at Mindspeak] and to the
Ambassador to Kenya Roxane de Bilderling. As I scanned the news and
the names of the Attackers, I looped back to one of my French O Level
books, the inestimable Albert Camus' L'Etranger and this quote;
“The Byronic hero, incapable of love, or capable only of an impossible
love, suffers endlessly. He is solitary, languid, his condition
exhausts him. If he wants to feel alive, it must be in the terrible
exaltation of a brief and destructive action.”
Surely Najim Laachraoui and Brahim el-Bakraoui are not Byronic Heroes
by any stretch of the imagination but in their minds, they are.
In the Financial Markets, there is a concept called ''Tail Risk'' -
Tail risk is the risk of an asset or portfolio of assets moving more
than 3 standard deviations from its current price. For example, in
early January, It took just 15 minutes on a Monday morning for South
Africa’s rand to plummet 9%. More than a year ago, the Swiss franc
surged almost 30 percent versus the euro after the central bank
abandoned its currency floor against the shared currency. The Examples
are numerous. If the markets are a mirror, then they are certainly
reflecting a New Normal around Volatility and Tail Risks.
Ben Bernanke was asked why people hold gold and he said: "As
protection against what we call tail risks: really, really bad
outcomes."
Therefore, my first Question is how big is the Tail Risk in our World
of more than 7b. Lets say 0.5% of 7b, thats 35m People! Drop that to
0.05% and you still have 3.5m People. So thats my First Point, the
absolute number of Folks who are prepared to cross the Edge is a big
absolute number.
''The Edge... there is no honest way to explain it because the only
people who really know where it is are the ones who have gone over''
Hunter S. Thompson
Terrorists are waging Asymmetric warfare. They cannot stand Toe-to-Toe
with a conventional Army because they would be annihilated. However,
what they are doing is exploiting an asymettric opening.
How Much do you think the Brussels operation cost the Terrorists? Not
very much, I venture.
How much do you think the reaction has cost Belgium? More than a 100x.
If You look at it through the Prism of a Return on Investment, one
return Profile looks like a Go-Go Nasdaq stock pre the Crash [if we
assume the Pipe-Line of ''Byronic'' Heroes is limitless then we have
to appreciate the Terrorist Strategy is like a Free Option] and the
State's ROI looks seriously out of whack, its too expensive, it stalls
the entire Economy and more of the State's resources are diverted into
counter-Terrorism.
My Final Observation is this. Westgate, Garissa meant we were in the
cross-Hairs. Today, Terror is striking in the Heart of Europe. Terror
is surfing the new Flat World. There has been Diffusion. This is
counter-intuitively, positive for Kenya.
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@AP Investigation: China launders cash of foreign criminals Emerging Markets |
Scam artists, drug cartels and gangs from around the world have found
a new haven for laundering money: China. The country's well-developed
underground financial networks have caught the attention of foreign
criminals who are using China to clean their dirty money and pump it
back into the global financial system — largely beyond the reach of
Western law enforcement, an Associated Press investigation has found.
As China globalized, sending people and money abroad, so too did its
criminal economy. Gangs from Israel and Spain, cannabis dealers from
North Africa and cartels from Mexico and Colombia have laundered
billions in China and Hong Kong, slipping their ill-gotten gains into
the great tides of legitimate trade and finance that wash through the
region, according to police officials, European and U.S. court records
and intelligence documents reviewed by the AP
Frontier Markets
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Angola has sentenced a rapper and his book club to prison Quartz Africa |
Activist Angolan rapper Luaty Beirao and 16 other dissidents have been
sentenced to prison for planning to overthrow president Jose Eduardo
dos Santos at a book club meeting.
Beirao and the group were arrested in late June after participating in
a book club discussion of Gene Sharp’s 1993 book on nonviolent
resistance, From Dictatorship to Democracy: A Conceptual Framework for
Liberation. Angolans have called the trial a farce and international
human rights groups described the verdict handed down by a court in
Luanda as “outrageous.”
More optimistic observers see the trial of the “15+2”—15 activists
arrested and jailed since June, plus two other accused who were not
detained—as a tipping point for public outcry.
Conclusions
This kind of egregious behaviour can become the Straw that broke the
Camel's back.
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EU takes aim where it hurts Burundi: peacekeeper funding Africa |
Bujumbura’s 5,400-strong contingent in Somalia's AMISOM force -- which
earns the state roughly $13 million a year and its soldiers a combined
$52 million -- may be the Achilles heel of a government that wants to
keep its fractious army happy with the extra pay its troops earn from
peacekeeping.
Top Burundi officers attempted, and failed, to stage a coup in May,
but the rank-and-file army has broadly stayed above the political
fray.
"Support for Burundi’s contingent of AMISOM cannot continue as it is,"
a European diplomat said.
For each African soldier sent to Somalia, the contributing government
receives $1,000 a month for wages and logistics, paid for from a pot
funded by the EU. In Burundi's case, the government keeps $200 a month
and soldiers receive $800 each, a handsome bonus on top of their much
lower regular pay.
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+15. Nigeria's Promise Turns to Peril as Investors Head for the Exits @business Africa |
The promise of Africa’s biggest economy has turned to peril.
Companies drawn to Nigeria by the prospect of a population bigger than
Germany and Turkey’s combined are retreating; those staying have
publicly criticized the president, a military strongman in the 1980s
who came back to power via an election last year; and foreign
investors are pulling their money out.
The corporate tribulations that began with a slide in oil prices and
accelerated after the imposition of capital controls are also
entangled in a global emerging-market slump. In propping up the naira
in a futile bid to contain inflation, officials have jacked up
pressure on an economy running out of cash, deepening a black market
in currency trading and causing shortages of imported goods from fuel
to milk. U.S. officials said they will press their Nigerian
counterparts to change tack during talks in Washington this week.
“Our clients, Fortune 500 and other multinationals, are all quite
concerned by the state Nigeria finds itself in,” said Alexa Lion, a
senior analyst at Washington-based Frontier Strategy Group, which
advises companies looking at developing nations. “Sentiment has
worsened. There’s a lot of anxiety.”
After four years trying to gain traction, Truworths International
Ltd., a South African clothing retailer, last month gave up. It closed
its last two outlets in Nigeria, in the southeastern cities of Enugu
and Warri. Willing to tolerate dilapidated infrastructure, complicated
red tape and expensive rent, the company said the import and
foreign-exchange restrictions caused it to throw in the towel.
“We were happy to lose money for a few years while we developed the
business and opened new stores,” Chief Executive Officer Michael Mark
said in an interview. “The straw that broke the camel’s back was not
being able to get stock into Nigeria. You can’t have a clothes shop
with no clothes. With all the other things, it just wasn’t worth it.
It was impossible to do business.”
Nigeria’s appeal has faded as the price of oil, source of 90 percent
of export earnings, has crashed. Growth slumped to 2.8 percent last
year, the slowest since 1999, and will decelerate to 2 percent in
2016, according to Morgan Stanley. In dollar terms, the economy in
2019 will still be 17 percent smaller than its 2014 peak of $542
billion. Only two years ago, McKinsey & Co. said Nigeria had the
potential to grow 7.1 percent annually until 2030 and build a $1.6
trillion economy.
As Nigeria lags, other countries in sub-Saharan Africa have gotten
more appealing. Last month, Nigeria fell from first to fourth, behind
Ivory Coast, Kenya and Tanzania, in a ranking of business prospects by
the research unit of Nielsen Holdings Plc.
Markets are betting Nigeria will be forced to follow oil exporters
from Russia to Kazakhstan and Mexico and let the currency weaken.
While the naira has been all but pegged at 197-199 per dollar since
March 2015, forward prices suggest it will drop 29 percent to 280 in a
year. The black market rate has weakened to 320.
Bruno Witvoet, the Africa President of Unilever, whose Nigerian
subsidiary has seen its shares plunge 31 percent since Buhari came to
power, said it would be “very insane” for the country to persist with
the currency policies. Nestle SA says its local unit, which has fallen
18 percent in that period, has had to widen the number of banks it
uses so that it can access enough foreign exchange.
Not all companies are gloomy. In January, Coca-Cola Co. agreed to pay
about $240 million for a 40 percent stake in Chi Ltd., which is based
in Lagos, and makes fruit juice and dairy products. Boston Consulting
Group this month opened its first office in Nigeria.
“It’s an immense market,” said Geoffrey White, CEO for Africa at
Kuwait-based Agility Public Warehousing Co K.S.C., which plans to
spend hundreds of millions of dollars building four warehouse and
logistics parks in Lagos and the capital Abuja by 2020. “You can’t
really have an African policy without having Nigeria high up on the
list.”
Conclusions
These are the risks in Africa. Policy Making Catastrophe Risk
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@Kenya_Re Kenya Re reports FY PAT 2015 +13.295% Earnings here Kenyan Economy |
Par Value: 2.50/-
Closing Price: 19.85
Total Shares Issued: 699949068.00
Market Capitalization: 13,893,989,000
EPS: 5.10
PE: 3.892
Leading reinsurance and insurance provider.
FY Gross premiums written 13.060341b vs. 11.570090b +12.880%
FY Net earned premium 12.016078b vs. 10.313408b +16.509%
FY Investment income 3.041138b vs. 2.591935b +17.331%
FY Fair value gains on revaluation of investment properties 729.599m
vs. 684.798m +6.542%
FY Total income 16.411126b vs. 13.761038b +19.258%
FY Gross claims incurred [7.391724b] vs. [6.394214b] +15.600%
FY Net claims incurred [7.061610b] vs. [5.957540b] +18.532%
FY Cedant acquisition cost [3.402811b] vs. [3.017738b] +12.760%
FY Profit before taxation 4.514136b vs. 3.919732b +15.164%
FY Profit after taxation 3.554250b vs. 3.137172b +13.295%
EPS 5.10 vs. 4.48 +13.839%
Cash and cash equivalents at 31st December 6.276010b vs. 6.732020b -6.774%
Dividend 0.75 vs. 0.70 +7.143%
A Selection of Tweets from @Kenya_Re
KenyaReinsurance "We have set up a Subsidiary in Zambia to operate as
a regional hub to Southern African markets such as Botswana
https://mobile.twitter.com/Kenya_Re/status/715052081367945218?p=v
KenyaReinsurance #KenyaReFinancialResults Investment Portfolio grew to
Ksh26.86Billion up from Ksh25.81Billion in Dec 2014
https://mobile.twitter.com/Kenya_Re/status/715047175756115968?p=v
Conclusions
It remains seriously inexpensive on a PE Basis.
Seems to have navigated the Mark-to-Market Imbroglio better than others
Its a BUY at a Price of 19.85
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.@National_Bank issues a Full Year Profits Warning Kenyan Economy |
NBK's Earnings for the year ended 31st December 2015 will be at least
25% lower than that reported in the year ended 31st December 2014
primarily due to two factors
a] NBK's NPLs increased towards the end of 2015 which led to a sharp
increase in the level of the impairment charge. The Bank has
identified the NPLs and has taken a series of steps to manage recovery
of said position.
b] The Projected sale of one key low yielding asset [approved by the
Board] was not completed in the year thereby reducing the projected
income from the same.
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@National_Bank of Kenya Sends CEO on Forced Leave to Allow Audit Kenyan Economy |
National Bank of Kenya Ltd. placed Managing Director Munir Ahmed on
compulsory leave pending an internal audit, a day after dismissing
speculation on social media that he’d been fired.
Five top managers at the Nairobi-based lender have also been sent on
leave, the Nairobi-based bank said in an e-mailed statement Tuesday.
The board appointed Wilfred Musau as acting-chief executive officer,
it said.
“The aforementioned actions by the board are an unequivocal
demonstration of our commitment to strict adherence to corporate
governance tenets and the various Central Bank of Kenya guidelines,”
Chairman Mohamed Hassan said in the statement.
Ahmed said he disagreed with the board placing him on compulsory leave.
“I don’t want to speculate on what’s behind the board’s decision,” he
said in a phone interview. “I totally disagree with the decision. It’s
not in line with corporate-governance practices.”
National Bank, which ranks as Kenya’s 10th biggest lender, in January
scaled back plans to expand after the government failed to approve
proposals by the state-controlled lender to raise capital. Kenyan
Treasury Secretary Henry Rotich said in October the government is
considering merging National Bank with Consolidated Bank of Kenya
Ltd., Development Bank of Kenya Ltd. and other state-owned lenders as
part of a plan to sell government assets to private investors.
Earlier this month, the government canceled its plan to provide 4.9
billion shillings for the bank’s proposed rights offer.
Shares in National Bank fell as much as 9.3 percent to an 11-year low
on Tuesday, before recouping its losses to close down 0.7 percent at
14.45 shillings. Four times the three-month daily average of shares
traded during the day.
“Government withdrawing funds meant for the rights issue will
significantly constrain the bank in growing its balance sheet,”
Standard Investment Bank analyst Francis Mwangi said by phone from
Nairobi.
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@LibertyLifeKe Liberty Kenya reports FY PAT 2015 -35.939% Earnings here Kenyan Economy |
Par Value:
Closing Price: 16.00
Total Shares Issued: 535707499.00
Market Capitalization: 8,571,319,984
EPS: 1.37
PE: 11.67
FY Gross earned premium revenue 9.352567b vs. 8.036914b +16.370%
FY Less: Outward reinsurance [3.826733b] vs. [3.344429b] +14.421%
FY Net insurance premium revenue 5.525834b vs. 4.692485b +17.759%
FY Commissions earned 794.679m vs. 668.577m +18.861%
FY Investment income 1.833886b vs. 2.968254b -38.217%
FY Total income 8.271656b vs. 8.302552b -0.372%
FY Net insurance benefits and claims [3.126117b] vs. [3.456461b] -9.557%
FY Commissions payable [1.181061b] vs. [0.921303b] +28.195%
FY Other operating expenses [3.010776b] vs. [2.588137b] +16.330%
FY Results of operating activities 0.953702b vs. 1.336651b -28.650%
FY Profit before income tax 0.953702b vs. 1.346569b -29.175%
FY Profit for the period 0.736050b vs. 1.148985b -35.939%
EPS 1.37 vs. 2.14 -35.981%
Cash and cash equivalents at 31st December 6.757174b vs. 6.251762b +8.084%
Dividends – vs. 0.50
Company Commentary
maintained consistent growth in revenues and net assets for the Year
Both long-term and short-term lines of business in Kenya and Tanzania
registered positive growth in core insurance earnings
This Year's performance was delivered against the backdrop of an
increasingly challenging operating environment characterised by
intense competition from traditional and non-traditional Players
Value of investments in both listed equities and bonds across the East
African market experienced a significant decline
No Dividend
Conclusions
It was a difficult Year from a Mark-to-Market Basis.
This is a well-managed Franchise.
buy on dips.
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East African Cables reports FY Loss 2015 -741.204m Earnings here Kenyan Economy |
Par Value: 0.50/-
Closing Price: 7.35
Total Shares Issued: 253125000.00
Market Capitalization: 1,860,468,750
EPS: -2.21
PE: 6.336
Leading Kenyan cable manufacturer.
East African Cables Limited FY 2015 through 31st December 2015 vs.
31st December 2014
FY Revenue 3.724212b vs. 5.098417b -26.954%
FY Cost of sales [3.110205b] vs. [3.778927b] -17.696%
FY Gross profit 0.614007b vs. 1.319490b -53.466%
FY Administrative expenses [401.778m] vs. [262.783m] +52.893%
FY Impairment of receivables [329.007m] vs. –
FY Results from operating activities [649.783m] vs. 577.157m
FY Exchange losses [312.194m] vs. [39.262m] +695.156%
FY Net finance costs [437.221m] vs. [69.674m] +527.525%
FY [Loss]/profit before income tax [1.087004b] vs. 0.507483b -314.195%
FY [Loss]/profit for the year [741.204m] vs. 341.149m -317.267%
EPS [2.21] vs. 1.16 -290.517%
Cash and cash equivalents at 31st Dec [88.820m] vs. [292.826m] -69.668%
Company Commentary
The Overall decline in performance was attributable to
a] Interruptions in our production processes as we concluded process
flow re-alignment in our refurbished Kitui road plant.
b] Foreign Exchange Losses due to sharp depreciation of regional
currencies against the USD
c] Decline in London Metal Exchange prices by 20% within the year
d] Low demand in our exports markets due to political environment
prevailing within the region.
e] impairment of receivables. Though collection efforts are in place
to recover those debts, the group found it prudent to carry a
provision on these receivables.
''The group opened the year with a strong order book''
Conclusions
Soft Earnings.
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TransCentury given six months to clear debt Kenyan Economy |
TransCentury bond holders have now given the investment firm an
additional six months from March 25 to clear a $40 million (Sh4.04
billion) debt it owes them after they earlier agreed to halve the
firm’s principal dues to that amount.
The company’s acting chief executive Ng’ang’a Njiinu said on Tuesday
the six-month lifeline has been handed to it as part of a deal
brokered with the bond holders, which saw them also agree to retire
half of the debt owed to them.
“We have up to six months extension to pay the debt from the March 25
date, but we are optimistic of clearing it earlier before the new due
date,” Mr Njiinu told the Daily Nation in an interview at his office.
Mr Njiinu, however, remained cagey on how bond holders agreed to set
aside the initial debt by condensing it by half, and whether the move
was accompanied by compromises.
But ruling out strings attached to the debt relief deal, Mr Njiinu
insisted that the bond holders “were happy to get the $40 million
dollars and walk away for good,” as part of the landmark final
settlement with the investment firm.
“They are happy to get 40 million dollars and that’s it. It will be a
full and final settlement. It is good for our shareholders,” Mr Njiinu
said as he termed the deal a big win.
He said the bond holders had earned interest since the Eurobond was
listed in 2011, insisting that it made business sense. A letter
written by the bond holders Farallon Capital Europe LLP and South
Africa-based Investec Asset Management Ltd to a select group of
TransCentury founder shareholders, had earlier proposed the means by
which the company could settle the balance of Sh4 billion beyond the
March 25 deadline.
According to the letter, earlier seen by the Nation, upon receipt of
the initial sum in cash, the bond holders had suggested that the
redemption date be extended by one year to March 2017.
Thereafter, the creditors had proposed that TransCentury undertakes a
rights issue whose proceeds would be used to settle the outstanding
dues, according to the letter sent to Mr Eddy Njoroge, Mr Jimnah Mbaru
and the estate of the late James Gachui — the founder chairman.
Under the deal, the same bond holders would underwrite the cash call,
meaning they would be in a position to assume majority control of
TransCentury should its current owners be unable to pay the final
balance.
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Carbacid reports H1 EPS +8.046% Earnings here Kenyan Economy |
Par Value: 5/-
Closing Price: 14.85
Total Shares Issued: 254851988.00
Market Capitalization: 3,784,552,022
EPS: 1.55
PE: 9.581
H1 Turnover 242.767m vs. 215.976m +12.405%
H1 Finance income – net 88.534m vs. 53.909m
H1 Foreign exchange differences [1.211m] vs. 1.633m +174.158%
H1 Revaluation of equity investments [7.521m] vs. 27.399m
H1 Profit before taxation 322.569m vs. 298.917m +7.913%
H1 Net profit after tax 238.701m vs. 221.200m +7.912%
EPS 0.94 vs. 0.87 +8.046%
Total net assets 2.781906b vs. 2.522150b +10.299%
Balance at 31st January 744.089m vs. 691.095m +7.668%
Interim Dividend -
Company Commentary
Turnover for the first 6 months increased +14% due to higher demand in
local and export markets.
Revaluation of Equity Investments -7.521m versus +27.399m
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Kenya Orchards reports FY PBT 2015 +194.191% Earnings here Kenyan Economy |
Par Value: 5/-
Closing Price: 97.00
Total Shares Issued: 12868124.00
Market Capitalization: 1,248,208,028
EPS: 0.33
PE: 293.93
FY Revenue 60.974312m vs. 58.062204m +5.015%
FY Cost of sales [54.194111m] vs. [54.062204m] +0.011%
FY Gross profit 6.780201m vs. 3.874292m +75.005%
FY Administrative expenses [2.062130m] vs. [1.855236m] +11.152%
FY Finance costs [0.197581m] vs. [0.052687m] +275.009%
FY Profit before tax 4.328873m vs. 1.471448m +194.191%
FY Income tax 24.586775m vs. [26.732995m] +191.972%
FY Profit and total comprehensive income for the year 28.915648m vs.
[25.261547m] +214. 465%
EPS 0.33 vs. [1.97] +116.751%
Cash and cash equivalent at the end of the year [0.323641m] vs. 0.027998m
Conclusions
Expensive on a PE Basis
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N.S.E Today |
Comments by Janet Yellen and in particular ''caution is especially
warranted because, with the federal funds rate so low, the FOMC's
ability to use conventional monetary policy to respond to economic
disturbances is asymmetric'' proved a Red Rag to the Bulls.
Markets saw this as confirmation that the FED will tread with
circumspection and extreme care and bought up riskier Assets and sold
the Dollar.
The Kenya Shilling [tends to react more immediately than the Stock
Market] rallied to a Fresh 6 month High of 101.30 and looks set to
push below 101.00
The Nairobi All Share eased back 0.46 points to close at 146.61.
The Nairobi NSE20 closed 14.23 points lower at 3981.33. The 4,000
Level remains a key pivot level.
We had lots of Earnings Releases today and a Profits Warning from
National Bank which closed at an 11 year Low.
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N.S.E Equities - Agricultural |
Eaagaads [which is the only Coffee Pure-Play] rallied +6.122% to close at 26.00
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N.S.E Equities - Commercial & Services |
Standard Group which reported a Full Year Loss earlier this week
followed on yesterdays gain to rally a further +6.03% to close at
30.75. The Bounce has been on very small volume.
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N.S.E Equities - Finance & Investment |
Kenya Re reported a +13.295% Full Year Profit after Tax Acceleration
[and going counter trend to the Insurers Earnings Curve to date], a
+12.880% acceleration in FY Gross premiums written which clocked
13.060341b , FY EPS clocked 5.10 +13.839% and the Full Year Dividend
was raised +7.143%. Kenya Re is seriously inexpensive on a PE Basis
[less than 4] and that discount has been in play for a number of years
and looks as if it should narrow. Kenya Re seems to have navigated the
Mark-to-Market Imbroglio better than others. Kenya Re eased -0.5% to
close at 19.75 and traded just 7,700 shares. Kenya Re is -9.4% in 2016
and will head back to scratch.
Liberty Life Kenya reported a -35.939% deceleration in FY PAT for
2015. There was double digit headline FY Revenue growth [Gross Earned
Premium Revenue] +16.37% to 9.352b, FY EPS declined -35.981% to 1.37
and the Dividend was skipped. Liberty said that ''Both long-term and
short-term lines of business in Kenya and Tanzania registered positive
growth in core insurance earnings'' but that ''This Year's performance
was delivered against the backdrop of an increasingly challenging
operating environment characterised by intense competition from
traditional and non-traditional Players'' They also spoke to
Mark-to-Market impairments and said ''Value of investments in both
listed equities and bonds across the East African market experienced a
significant decline''
It was a difficult Year from a Mark-to-Market Basis but This is a
well-managed Franchise and is to be bought on dips. Liberty eased
-2.75% to close at 15.90 on light trading. Liberty is -24.28% in 2016.
Pan Africa Insurance Co. slumped -8.75% to close at a Fresh 2016 Low
of 36.50. Pan Africa has slumped -39.166% in 2016.
National Bank issued a Full Year Profits Warning [The Delay in
releasing the Full Year Results probably signals the Auditors were
unhappy about signing them off - The Risk-Reward for auditors has
inverted] citing two reasons,
NBK's Earnings for the year ended 31st December 2015 will be at least
25% lower than that reported in the year ended 31st December 2014
primarily due to two factors
a] NBK's NPLs increased towards the end of 2015 which led to a sharp
increase in the level of the impairment charge. The Bank has
identified the NPLs and has taken a series of steps to manage recovery
of said position.
b] The Projected sale of one key low yielding asset [approved by the
Board] was not completed in the year thereby reducing the projected
income from the same.
Furthermore National Bank have placed the Managing Director Munir
Ahmed on compulsory leave pending an internal audit, a day after
dismissing speculation on social media that he’d been fired.
Five top managers at the Nairobi-based lender have also been sent on
leave, the Nairobi-based bank said in an e-mailed statement Tuesday.
“I don’t want to speculate on what’s behind the board’s decision,” he
said in a phone interview. “I totally disagree with the decision. It’s
not in line with corporate-governance practices.” [BBG]
National Bank shares slumped 9.34% to close at an 11-year low 0f
13.10. National Bank has fallen -16.825% in 2016.
Standard Chartered Bank firmed +0.44% to close at 227.00 and has
closed at a Fresh 2016 High. StanChart is +16.41% in 2016.
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N.S.E Equities - Industrial & Allied |
Bamburi Cement was the most actively traded share at the Securities
Exchange and closed unchanged at 190.00 where 1.004m shares worth
190.800m were traded. Bamburi Cement reported previously a FY EPS
acceleration of +47.857% and is +8.571% in 2016.
EABL rallied +1.42% to close at a 3 month High of 285.00 and traded
154,300 shares.
East African Cables [where Trans-Century is in a majority position]
reported a FY Loss after Tax of -741.204m versus a Profit of 341.149m
in FY14. FY Revenue slumped -26.954% to 3.724212b and FY EPS was
-2.21.
The Overall decline in performance [said the Company] was attributable to
a] Interruptions in our production processes as we concluded process
flow re-alignment in our refurbished Kitui road plant.
b] Foreign Exchange Losses due to sharp depreciation of regional
currencies against the USD
c] Decline in London Metal Exchange prices by 20% within the year
d] Low demand in our exports markets due to political environment
prevailing within the region.
e] impairment of receivables. Though collection efforts are in place
to recover those debts, the group found it prudent to carry a
provision on these receivables.
The Final comment ''The group opened the year with a strong order
book'' could not escape the fact that these were soft results. EA
Cables slumped -6.802% to a Fresh 2016 Low of 6.85. EA Cables is
-35.37% in 2016.
Trans-Century [according to a report carried in the Nation] have now
been given ''an additional six months from March 25 to clear a $40
million (Sh4.04 billion) debt it owes them after they earlier agreed
to halve the firm’s principal dues to that amount.'
“We have up to six months extension to pay the debt from the March 25
date, but we are optimistic of clearing it earlier before the new due
date,” Mr Njiinu told the Daily Nation in an interview at his office.
But ruling out strings attached to the debt relief deal, Mr Njiinu
insisted that the bond holders “were happy to get the $40 million
dollars and walk away for good,” as part of the landmark final
settlement with the investment firm.
“They are happy to get 40 million dollars and that’s it. It will be a
full and final settlement. It is good for our shareholders,” Mr Njiinu
said as he termed the deal a big win.
Trans-Century closed unchanged at an all time Low of 5.20 and remains
-36.96% in 2016.
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