Tuesday, July 12, 2005

Mid-week Mix

Extraordinary Equity
Equity Bank who have said that they will list on the Nairobi Stock Exchange later this year will hold an extraordinary general meeting (EGM) on August 10th where shareholders are expected to increase the Bank’s share capital from 250 to 500 million shillings, by creating 50 million new shares of equal rank. Also the owners will convert 362 million shillings in share premium into 27 million shares which will be distributed to members (as at June 30th 2005) in a 4 (new) for 1 (old) share ratio.

The 50 million new shares will be availed to new shareholders in the IPO, but the bonus means that the owners are pocketing some gains before the IPO. Equity is 84% owned by over 2,400 indigenous shareholders (managers have a significant stake alongside customers and staff) and 16% by AFRICAP (a consortium of international development investors principally International Finance Corporation - the private sector arm of the World Bank - and the European Investment Bank). There’s no prospectus yet and no investment Bank has yet publicly associated itself with the Equity IPO.

6 Month Results & Dividends
British American Tobacco’s (January to June) turnover increased to 5.3 billion shillings, from 4.5 billion in 2004. Profit before tax went up from 883 to 957 million and the firm will pay an interim dividend of 4.5 shillings pr share (same as last year)

East African Cables six month turnover increased from 313 to 454 million, and profit before tax doubled from 51 to 100 million. They will pay an interim dividend of 1.5 shillings per share (up from .75)

More half year results are expected soon from BAT, EA Portland, Sameer, Firestone, Kakuzi, Nation, Limuru Tea, Total, Serena, Unilever Tea and all comemrcial banks.

Still Interested?
Five years ago, HSBC, was among the front-runners in the battle to takeover KCB. Now that the Government has announced that it will exit the Banking sector, could HSBC, now linked with new Kenyan investor Prince Alwaleed of Saudi Arabia still be interested in the Government’s 26% (and controlling) stake in the Bank?

Clinton to Kenya
Former President Clinton will Clinton be in Kenya next week as part of an African trip. He is expected to visit President Kibaki and praise the free primary education program.


Anonymous said...

From kuoasan:

BAT has announced Interim 2005 & I have to give credit to EA Cables with the speed they released results. It sure beats the slowpokes out there!

Equity is going for an IPO but I wonder about the quality of earnings i.e. are they real? I hope CBK & CMA make sure investors are protected.

KCB used to post huge numbers during kaminchia's time but these were "fake" profits that had to be written off in later years. Barclays & Standard make real profits that they pay out in dividends!

Much of KCB's past profits were on bad loans thus the interest earned was also "bad"... this is what Davidson calls the "Bad" Book.

Similar story with NBK with loans to KMC, somaia & goldenberg. Sure these loans attracted interest but it was never paid by the borrowers thus the huge write-offs!

Anonymous said...

From kuoasan (I will set up my ID soon!)

KQ's share price has hit a bump in the road even though the P/E is less than 10. It dropped to 78/- (from a high of 82/-) with only less than 300,000 shares traded.

Will the rest of the market follow?

I do not understand the huge jump in Agriculturals... any explanations?

I don't think KCB needs a strategic partner but it should have a strong & deep management team in place. It has an opportunity to grow in East Africa esp underbanked areas as long as it has a low cost structure.

KCB needs to remain nimble or it will be caught between BBK & SCBK (who do an excellent job covering the large corporates) & smaller players like Equity. Even the mid-market has tough players like NIC Bank & I&M Bank.

bankelele said...

Great comments Kuoasan. I would not put KCB in the same boat with NBK, but they need to re

Shiroh said...

I guess it would be interesting to se at what equity will offer for the IPO but i think i will subscribe.


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