Shares Portfolio February 2012

Comparing to last quarter and a year ago.

2007 was considered a wait & see year for firms in Kenya and 2012 looks to be the same with elections set for sometime in the last third of the year. Banks are expected to announce profits this month, amid allegations that some of their gains were due to lax oversight by the Central Bank which may also have contributed to the weak Kenya shilling late in 2011. Local news is dominated by electioneering, loan rates are above 25% and it's expected to be a challenging year for Kenya Airways, Safaricom and other companies as well.

The Stable
Barclays ↓
Bralirwa (Rwanda) ↓
Britak ↓
Diamond Trust Bank ↓
East African Breweries (EABL) ↑
Kenya Airways ↓
Kenya Commercial Bank (KCB) ↑
Kenya Oil Company (Kenol) ↑
Safaricom ↑
Scangroup ↑
Stanbic (Uganda) ↓
Uchumi ↓


Review
Best Performer: EABL (up 12.9% in 3 months), Safaricom, KCB
Worst Performer: Stanbic Uganda (down -28.8% in 3 months), Britak, Uchumi
In: None
Out: None
Increase: KCB, KQ
Decrease: none

Unexpected gains/losses: Last week, Barclays announced special dividend to go a long with a final dividend. Similarly, Williamson Tea announced a record interim special dividend of Kshs. 50 ($0.55) per share following the sale of their building.

ION two companies at the NSE - East African Portland Cement and CMC Group
appear to have imploded from the inside with board wrangles disrupting the company operations and leading to both being suspended from the NSE.

Events/Outlook: The portfolio excluding new shares is down 4% from last November, while the Nairobi Shares Exchange main index is down 9% over the same period.

Looking Forward to:
1. Investing in Government bonds - the government was selling a 30 year savings bond that paid 12% and targeted to raise Kshs. 18 billion with a minimum investment of Kshs 50,000 ($615), and this month, there's a tap sale of 12 year infrastructure bond 12 year as the government seeks to raise Kshs 17.7 billion ($196 million). Minimum investor amount is Kshs. 100,000 ($1,111) and the average yield has been 16.6%
2. Kenya Airways rights issue
3. Any other new listings at the NSE.