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Monday 07th of August 2017 |
Morning Africa |
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser. 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 |
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Aug. 07, 2017 The End Zone and the Mighty Dollar Africa |
The end zone in american football is where a football team scores. Some teams will start the move near their own end zone and string a sequence of moves to get to the opponent's end zone. Occasionally, a team will throw a ''hail-mary'' pass and make a score out of nowhere.
The dollar had been in a precipitous decline in 2017 and until last week had crashed about 12 per cent lower versus the euro and as an index [against a basket of currencies] was down 11 per cent. The $5.1 trillion (Sh529.74 trillion) a day foreign exchange markets [the most liquid market in the world] had watched incredulously as Washington metastasized into a new epicentre of global uncertainty and as the special prosecutor Robert Mueller the third's hot breath could be felt on President Trump's collar. President Trump is a unique individual but his twitter account gives us surgical and real-time insights into his mental state. President Trump had drawn a ''red line'' with respect to the special prosecutor in a New York Times interview where he had said 'probing his business and his family’s financial dealings would be a “violation.” Last week, we learnt this red line has been crossed.
Any financial expert will tell you that President Trump's financial affairs are a ''smoking gun.'' Deutsche Bank loans were surely ''mirror'' transactions, where Deutsche Bank was a commission agent interposed between Trump and the real lender. All those sales where Trump proclaimed himself a ''genius'' because they were so off-market, we would all be incredulous, were essentially just that ''incredible''. There is a prima facie case here and its in plain sight. President Trump knows it and that's why he has been demanding Al Pacino [a la Martin Scorsese's godfather] style demands of loyalty from the likes of the now dispensed with FBI director James Comey.
What was interesting last week is that the dollar picked itself of the floor and we witnessed a rebound into the end of the week. Its nascent but it was noteworthy. It was as if the FX markets had reached the conclusions that it is all in the price now, maybe not an impeachment but pretty much everything else is baked into the price of the dollar.
The dollar is the elephant in the room [financial markets]. This week we will need to study it closely for the signals that it emits.
I think the rebound will gather strength because just about everyone has been lulled into a sense of security. And that the dollar which was deep in its end-zone has just thrown a hail-mary pass, which is set to make up a lot of ground.
Home Thoughts
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Road Trip Mara Africa |
“Sal, we gotta go and never stop going 'till we get there.' 'Where we going, man?' 'I don't know but we gotta go.” ― Jack Kerouac, On the Road
“Live, travel, adventure, bless, and don't be sorry.” ― Jack Kerouac
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Himalayan impasse highlights China-India tensions @FT Law & Politics |
On a windswept Himalayan plateau usually frequented by seasonal yak herders, hundreds of troops from China’s People’s Liberation Army and the Indian Army are locked in a stand-off over a small but strategic piece of land.
Bullets are not flying, but rhetoric is, with Beijing warning New Delhi to “correct its mistake” by withdrawing its troops from the contested terrain, that China calls its own.
India — which says it is has merely come to the defence of its tiny neighbour Bhutan that also claims the land — has ruled out a unilateral withdrawal, while insisting it wants a peaceful resolution of the problem.
In the past few days, China has ratcheted up its official demands for a swift Indian climbdown, raising fears of imminent escalation. A senior Chinese diplomat in New Delhi has warned of “serious consequences” if Indian troops fail to withdraw. The Chinese defence ministry told India that “restraint has a bottom line”.
Analysts say the showdown on the Doklam Plateau — known as Donglong in Chinese — reflects the increasingly bitter rivalry between the two Asian neighbours, whose relations have deteriorated despite efforts to reset ties and foster stronger economic relations.
“Doklam is not about a road,” wrote Praveen Swami, the strategic affairs editor of the Indian Express newspaper. “It is a message about China’s ire at India building alliances with its adversaries in Asia, and with the US. Beijing seeks, through the threat of force, to instruct India on how countries ought to conduct themselves.”
For its part, New Delhi is wary of what it sees as China’s efforts to encircle India by increasing its influence over India’s neighbours, including its rival Pakistan. New Delhi is also anxious about China’s efforts to court Bhutan, whose international relations are in effect controlled by India, to the growing resentment of some Bhutanese.
Zhang Ye, a fellow of the PLA’s Naval Research Institute, wrote that the stand-off was a “geopolitical competition in the disguise of a border dispute”, and would enable India to increase its military presence in the tiny Buddhist kingdom. “India is making use of Bhutan to increase its geo-advantage over China,” he wrote.
Conclusions
.@NarendraModi is boxed in by his right wing and Xi Jinping is giving him the Come-On.
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Transcripts Show How Contentious Trump's Calls Were With Mexican and Australian Leaders NYT Law & Politics |
With Mr. Peña Nieto, Mr. Trump repeatedly threatened to impose a stiff border tax to keep out Mexican products and complained about “pretty tough hombres” who were bringing so many drugs over the border that they had even made New Hampshire “a drug-infested den.” The biggest point of contention came as the president insisted that the Mexican president stop saying publicly that he would not pay for the wall that Mr. Trump had promised to build on the border between the two countries.
“If you are going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore because I cannot live with that,” Mr. Trump said.
Fresh from his inauguration, he had his campaign victory on his mind, boasting to Mr. Peña Nieto that “no one got people in the rallies as big as I did” and to Mr. Turnbull that “they said I had no way to get to 270” votes in the Electoral College “and I got 306.” He buttered up Mr. Peña Nieto, telling the interpreter on their call that “he speaks better English than me,” suggesting that the Mexican president would be so popular that the Mexican people will amend their constitution to allow him to run again and declaring that “it is you and I against the world, Enrique, do not forget''
“We find this completely unacceptable for Mexicans to pay for the wall that you are thinking of building,” Mr. Peña Nieto told Mr. Trump, explaining how precarious his position was at home. “I would also like to make you understand, President Trump, the lack of margin I have as president of Mexico to accept this situation.”
Mr. Trump too was conscious of his own position: “On the wall, you and I both have political problem. My people stand up and say, ‘Mexico will pay for the wall,’ and your people probably say something in a similar but slightly different language. But the fact is we are both in a little bit of a political bind because I have to have Mexico pay for the wall. I have to. I have been talking about it for a two-year period.
“This is a stupid deal,” Mr. Trump said. “This deal will make me look terrible.”
“Mr. President, I think this will make you look like a man who stands by the commitments of the United States.”
Mr. Trump was not buying it. “O.K., this shows me to be a dope,” he said. “I am not like this but if I have to do it, I will do it, but I do not like this at all.”
He said that he worried that the terrorists like those who killed Americans in Boston, San Bernardino and New York could be admitted to the country: “I am going to get killed on this thing.”
“You will not,” Mr. Turnbull insisted.
“Yes, I will be seen as a weak and ineffective leader in my first week by these people. This is a killer.”
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New Chief of Staff Reins in White House Aides-and Trump's Tweets Law & Politics |
On his fifth day on the job as Donald Trump’s new chief of staff, John Kelly gathered about 200 White House aides for a meeting where he spelled out in blunt terms the way things are going to work in the West Wing he now oversees.
The retired Marine Corps four-star general said he didn’t care whether they had been part of the Trump campaign or had joined the administration from Capitol Hill or another corner of the political world, according to people who attended the meeting. They all work for the president now, he told them, and they had to act as one team.
In his first week, Kelly also quickly moved to take control of the door to the Oval Office. His predecessor, Reince Priebus, seemed unable to stop White House staffers from popping in unannounced to see the president -- dropping news articles on his desk that he would love or hate, sharing ideas for tweets, or just getting valuable face time with the boss. Trump, who’s known to be easily distracted, would wave-in the visitors, even as his scheduled appointments sometimes backed up. Kelly insists that anyone who wants to see the president now must go through him.
Perhaps even more important, Kelly is testing his authority to tame Trump’s sometimes reckless tweeting habits. While Kelly isn’t vetting every presidential tweet, Trump has shown a willingness to consult with his chief of staff before hitting “send” on certain missives that might cause an international uproar or lead to unwelcome distractions, according to three people familiar with the interactions. Kelly has been “offering a different way to say the same thing,” the person said.
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UN imposes strict new sanctions on North Korean exports Law & Politics |
The United Nations Security Council unanimously imposed new sanctions on North Korea on Saturday that could slash by a third the Asian state’s $3 billion annual export revenue over its two intercontinental ballistic missile tests in July.
The US-drafted resolution bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. It also prohibits countries from increasing the current numbers of North Korean laborers working abroad, bans new joint ventures with North Korea and any new investment in current joint ventures.
“We should not fool ourselves into thinking we have solved the problem. Not even close. The North Korean threat has not left us, it is rapidly growing more dangerous,” US Ambassador to the United Nations Nikki Haley told the council.
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Ethiopia lifts 10-month state of emergency FT Africa |
Ethiopia has lifted a 10-month state of emergency imposed to quash anti-government protests across the country that left hundreds of people dead.
The restrictions on movement, gatherings and access to media were initially imposed for six months and then extended, albeit in diluted form.
The protests and the imposition of the state of emergency tarnished Ethiopia’s reputation as a fast-growing and secure country that had been a darling of the international investment community for the previous decade.
Befeqadu Hailu, who has been detained several times in recent years for his anti-government views, believes lifting the state of emergency will make little difference to people’s lives in a country where there is little tolerance of opposition views.
“The government used to do what it has done in the state of emergency even before it was declared,” said Mr Hailu. “So I don’t see any chance of it not doing so in the future. It’s more public relations than a relief to society.”
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Uganda, Tanzania start work on construction of $3.5bn oil pipeline Africa |
The leaders of Tanzania and Uganda laid a foundation stone on Saturday for the construction of a $3.55 billion-crude export pipeline that would pump Ugandan oil for international markets.
The 1,445 km-project - set for completion by 2020 - will stretch from landlocked Uganda's western region, where crude reserves were discovered in 2006, to Tanzania's Indian Ocean seaport of Tanga.
The project will become "the longest electrically heated crude oil pipeline in the world," said Guy Maurice, Senior Vice President of Africa at Total Exploration and Production.
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The South African Communist Party's lawmakers will support President Jacob Zuma in an Aug. 8 vote of confidence Africa |
The SACP has 17 members in parliament who back the ruling African National Congress because the two parties are in a political alliance, together with the Congress of South African Trade Unions. The SACP can’t join the opposition, which has an agenda to dislodge the ANC, the website reported, citing Alex Mashilo, a spokesman for the party.
The Democratic Alliance, the biggest opposition party, filed the no-confidence motion in April after Zuma’s decision to fire Pravin Gordhan as finance minister prompted two ratings companies to downgrade the nation’s foreign-currency debt to junk. While Zuma faces mounting opposition within the ANC, only a handful of its lawmakers have publicly said they will defy a party instruction and vote for his ouster.
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Kenya election tensions fill the air @FT Kenyan Economy |
In a corner of Kibera, a large informal settlement clinging to muddy slopes in the heart of Nairobi, men hawk illegal charcoal by the side of the red-mud alleyways that criss-cross Kenya’s biggest slum. Kids play football with a half-inflated ball. Nearby a group of men engage in an animated discussion about Tuesday’s presidential, legislative and local elections in a country where politics is part national sport and part deadly obsession.
There is a lot to discuss. Kibera is awash with rumours about recent events. In the past few days, the man in charge of the electoral commission’s technology system has been found dead, apparently tortured; the opposition has accused the ruling party of plotting to use the army to rig the election, a claim virulently denied; and a house belonging to the president’s running mate became the scene of an 18-hour gun battle. If democracy is war by other means, then in Kenya, home to one of the continent’s most fiercely contested political cultures, sometimes it is hard to tell the difference.
Kenya’s elections are among the most important in Africa partly because, despite its searing inequalities, the country is considered an African success story. It has a diverse economy, visibly improving infrastructure and one of the continent’s most tech-savvy and entrepreneurial business classes. Multinationals, including General Electric, Google, KPMG and Bayer, have made their regional hub in Nairobi, a city where buildings spring up daily and new cars clog the highways. China has poured money in too, helping to build roads and a $4bn railway connecting Nairobi to coastal Mombasa. The country was a pioneer of mobile money, an idea that is sweeping Africa.
Quinta Atiano, who lives in one of the tin-roofed dwellings that crowd Kibera, says: “We have no problem so long as the elections are free and fair. Violence will only come if this election is rigged.”
Like many in Kenya, Ms Atiano fears the chances of rigging are high. Raila Odinga, the 72-year-old leader of the opposition National Super Alliance, has spent months telling his supporters that he can lose only if the vote is stolen. Claiming that he has been cheated of the presidency twice before, this time he vows to topple Uhuru Kenyatta, 55, who won the contest last time round in a disputed result in which he cleared the 50 per cent hurdle by a tiny margin.
Patrick Gathara, a political cartoonist and blogger, likens Kenyan democracy to insanity, in which people take the same action every five years, by going to the polls, yet expect a different outcome. In reality, he says, the system stays the same, with the elites looking after their own interests. “Politics in Kenya is like a soap opera. It allows people to forget their real problems.”
There are other differences this time round, too, including the increasing importance of a plugged-in, urbanised youth. Of Kenya’s nearly 20m registered voters, more than half are under 35 and most of the estimated 5m registered first-time voters are under 25, Mr Odinga said in an interview with the Financial Times. “The youth are the ones who are going to bring change,” he says. “The youth are no longer so ethnically inclined.”
National polls, of varying reliability, barely separate Mr Odinga from Mr Kenyatta, though political analysts say the benefits of incumbency plus a five-year term characterised by heavy capital investment, tip the scales in Mr Kenyatta’s favour. It is the seeming presumption of victory by both sides that raises the spectre of violence.
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Kenya's central bank is taking an unusual approach to protecting its currency: intimidation. Kenyan Economy |
Monetary authorities in Nairobi have been cracking down on selling, hedging and even making bearish predictions, according to traders and analysts. In a sign of the skittishness, none of 12 market participants contacted by Bloomberg spoke on the record, citing possible retaliation.
“There’s a hush-hush rule on traders: Either talk up the shilling, or shut up,” said Kwame Owino, chief executive officer of the Institute of Economic Affairs, an independent research institute based in Nairobi that tracks Kenyan economic policy and financial markets. “This kind of pressure isn’t sustainable, especially when you have an open trading system. It will end in tears.”
The shilling is officially a free-floating currency, but it’s barely budged for months, with volatility falling to a third of the average for the benchmark emerging-market currency index last month. Traders say Yale University-educated central bank Governor Patrick Njoroge, in his post for two years, and deputy Sheila M’Mbijjewe have made their desires clear that traders shouldn’t speculate.
Still, some traders shared stories of being summoned, along with their bosses, to the central bank headquarters in Nairobi and getting reprimanded for publicly speaking about possible shilling weakness in public or for conducting trades that might hurt the currency. The traders said they are keeping a low profile to avoid putting their jobs at risk because their bosses don’t want to attract the wrath of the central bank.
For instance, they said the central bank is asking local banks to justify all hedging contracts arranged for clients wanting protection against future shilling declines. To avoid the hassle, some exporters are opting not to take any protection at all, three traders said.
Treasury Secretary Henry Rotich said Kenya’s debt, estimated by the International Monetary Fund at 54 percent of gross domestic product last year, is “sustainable” and only a sharp depreciation in the currency would alter that view.
“If the shilling depreciated by a huge margin, it would impact on debt repayments,” Rotich said in a July 31 phone interview. “But for us, it is a significant depreciation that will have an impact and by significant, I mean by a magnitude of 20 percent. If the dollar goes beyond 120 shillings, for example, that is when it will have a big impact on our debt.”
“What we need to ask ourselves is this: Will this escalate into a crisis and will that crisis lead to a very big slide? I fear that is what will happen,” Owino said.
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Kenya's presidential election winner is likely to be determined by just 9 of the country's 47 counties Kenyan Economy |
The winner of Kenya’s presidential elections on Tuesday is likely to be determined by voting in just nine of the country’s 47 counties, where the two main candidates are battling for dominance.
President Uhuru Kenyatta’s ruling Jubilee Party and his main rival, opposition leader Raila Odinga, have roughly equal support in 38 of the East African nation’s counties, according to data provided by pollster Infotrak and risk analysts Control Risks. Jubilee is ahead in five of the battleground counties, while support for Odinga’s National Super Alliance, a five-party coalition, dominates in four, data from the two companies, Ipsos Kenya and Verisk Maplecroft show.
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Safaricom Sees Amazon as Model for Kenya E-Commerce Platform Kenyan Economy |
Safaricom Ltd. of Kenya plans to introduce an e-commerce platform within eight months targeting formal retail and informal online trading in East Africa’s biggest economy, directors at the company said.
Known as Masoko, Swahili for markets, it will offer products ranging from electronics to beverages and cosmetics, and provide a tool for people currently buying and selling goods on social-media platforms such as Facebook, Director of Enterprise Business Rita Okuthe said in an interview. The portal is currently undergoing in-house testing, Safaricom Chief Executive Officer Bob Collymore said.
“This offering will not be holding inventory and neither will it be an anyone-can-sell arena,” Collymore said in an interview in the capital, Nairobi. “Safaricom is carefully screening all the merchants before giving them access to the platform.” Okuthe said the goal was to become “a little bit more” than an African equivalent of Amazon.com Inc.’s Marketplace.
Safaricom is looking for ways to build on the success of M-Pesa, its mobile-phone money transfer service that dominates the Kenyan economy and is used by subscribers to pay for everything from utility bills to groceries and gasoline. The company accounts for 75 percent of the country’s 40.6 million Internet users, while M-Pesa handled 432.5 billion shillings ($4.2 billion) of mobile commerce transactions in the first quarter, more than half the total 627.5 billion shillings ($6.04 billion), according to data published by the industry regulator.
Safaricom, based in Kenya’s capital, Nairobi, is mulling partnerships with logistics companies and could use global positioning systems to make deliveries in the absence of a national addressing system, Okuthe said. It’s aiming to cut delivery times from the current 72-96 hours, she said.
The platform could potentially be used by services including Africa Internet Group’s Jumia, Kilimall International and OLX, a unit of Johannesburg-listed Naspers Ltd. in the first phase of operations, according to Okuthe.
“If you look at Facebook and Instagram, there’s a lot of online/offline selling that happens and one of the reasons why they’re popular in Kenya is because small-scale, middle-scale merchants use it as a sales tool,” Okuthe said. “What we are going to be doing is formalizing that. At least five in 10 Kenyans have bought something they first saw online.”
The company will work with manufacturers and farmers looking for direct market access and reduce supply-chain inefficiencies including transportation costs and poor infrastructure, Okuthe said.
M-Pesa will be among a number of payment methods including other online wallet services and cards by Visa Inc. and Mastercard Inc. Safaricom plans to roll out Masoko by the end of March, and later expand the platform beyond Kenya, Okuthe said, without specifying what other markets the company is considering.
“We have some very big ambitions in terms of how big we want to scale and wherever we want to go,” Okuthe said.
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Unveiling Project Safari: Inside KQ's intricate rescue plan @BD_Africa Kenyan Economy |
The consensus is that KQ is in dire straits with only two options at its disposal; a complex balance sheet restructuring or close the airline, sell its assets and cherish the Pride of Africa’s good memories. However, for now at least, the National Treasury is not keen on playing mortician but it is also unwilling to pump in more taxpayer funds into the airline it affectionately describes as a “strategic national asset.” “As a major shareholder (government owns 26.7 per cent of KQ), we are keen to secure the airline’s future and ensure it has a healthy liquidity profile and remains operational,” Henry Rotich, the National Treasury Cabinet secretary, is quoted as saying. The government’s answer to this financial quandary — saving the airline without spending a dime — has birthed a complex restructuring plan whose details have been drip-released to the public in recent weeks. After a year or so of combing through the numbers and tens of meetings between KQ officials, the airline’s creditors and major shareholders KLM and the Treasury, it was announced that the government would be guaranteeing Sh77.3 billion in loans. In exchange for offering this guarantee cushion, the Treasury got the lenders to commit to new concessions — including extending the loan tenure and reducing interest payable every cycle in order to give KQ some breathing space. Local lenders have also committed Sh18.1 billion in new credit to KQ to principally secure aircraft engines refurbishment. But how did KQ amass this large amount of debt? The money is collectively owed to international lenders — Barclays Bank Plc, Citibank and JP Morgan —and 11 local banks. The US banks, through the Export-Import Bank of the United States of America (US Exim), lent KQ Sh54.07 billion to finance the aforementioned acquisition of aircraft, which also served as the facility’s security. This asset safety net has now been transferred to the Treasury with KQ noting that the value of the aircraft in question is “greater than the level of the debt that is subject to the government guarantees.” Local lenders had more appetite for risk, unwavering in their short-term unsecured support to the airline despite its evident bad health — KQ has recorded losses for five successive years since 2013. During this period, these banks increased their advances to the airline by over four times from Sh5.3 billion to Sh23 billion, which is now being guaranteed by the Treasury. READ: Eleven banks get Sh23bn Kenya Airways shares in bailout plan KQ owes Equity Bank Sh5.2 billion, National Bank (Sh3.5 billion), Co-operative Bank (Sh3.3 billion), CBA Group (Sh3.1 billion), and Sh2.1 billion each to NIC Bank , DTB and KCB Group , according to documents seen by the Business Daily. I&M Bank and Ecobank are claiming Sh824 million each from the cash-strapped airline, while Chase Bank and Jamii Bora Bank are owed Sh721 million and Sh412 million respectively. KQ also owes the government Sh27 billion, a tab taxpayers picked up after an interesting series of transactions. The Treasury, in May 2015, and with Parliament’s approval, lent KQ Sh4.2 billion to help the struggling airline meet its obligations, including paying staff salaries. This shareholder loan matured a year later but the airline is yet to wire a single shilling to the Treasury, instead channelling any free cash to more demanding creditors who have made a beeline for its finance office. In September 2015, the government guaranteed a Sh20.6 billion short-term credit from the African Export-Import Bank (Afreximbank), payable by 2018. The Treasury silently took up this obligation at some point in the year to March 2017, perhaps appraised of the reality that KQ was never going to meet the fast-approaching repayment deadline. These obligations — when lumped together with those owed to other types of creditors including lessors — pile up to about Sh242 billion. KQ’s financial tribulations are huge and it is clear why the national carrier is struggling to meet its commitments. The balance sheet reorganisation will unlock “cash-flow relief” of Sh37 billion over five years — through tenure adjustments — and reduce its total debt exposure by Sh51 billion. The plan will also leave KQ in a positive equity position of Sh11.8 billion from the current negative Sh44.9 billion. This is just a small part of the intricate plan that has been developed by several firms including PTJ Partners (restructuring advisor) and White & Case (international counsel) with Mbuvi Ngunze, former KQ chief executive as lead advisor.
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WPP ScanGroup reports H1 2017 EPS -40.909% Earnings here Kenyan Economy |
Par Value: 1/- Closing Price: 23.75 Total Shares Issued: 378865102.00 Market Capitalization: 8,998,046,173 EPS: 1.12 PE: 21.205
The largest marketing services company in East Africa.
H1 Revenue 1.998379b vs. 2.570570b -22.259% H1 Operating and administrative expenses [1.898301b] vs. [2.397632b] -20.826% H1 Other income 9.693m vs. 17.780m -45.484% H1 Net interest income 140.198m vs. 237.860m -41.059% H1 Foreign exchange loss [5.489m] vs. [33.508m] -83.619% H1 Profit before tax 244.480m vs. 395.070m Basic and diluted EPS 0.39 vs. 0.66 -40.909% No interim dividend
Company Commentary
Revenue decreased by 22% over the corresponding prior year period to 2.0b The reduction was in line with budget and was driven by 1 Pan-African client significantly reducing their level of marketing spend across the region plus reduced scope of work with several other clients and with our core client in Gabon. A 21% reduction in operating expenses EPS declines 42% to 0.39 While the Group has seen significant revenue pressure in H1 2017, this was compounded further by the strong comparative period in 2016. We expect revenues to be stronger in H2 No interim dividend.
Conclusions
Soft H1 Earnings.
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@Kenya_Re reports H1 2017 EPS +4.036% Earnings here Kenyan Economy |
Par Value: 2.50/- Closing Price: 21.50 Total Shares Issued: 699949068.00 Market Capitalization: 15,048,904,962 EPS: 4.7 PE: 4.574
Kenya Reinsurance Corporation Ltd H1 2017 results through 30th June 2017 vs. 30th June 2016 H1 Gross written premiums 7.504451b vs. 7.096326b +5.751% H1 Net written premium 7.331968b vs. 6.718950b +9.124% H1 Net earned premium 7.089182b vs. 6.475500b +9.477% H1 Investment income 1.671447b vs. 1.720906b -2.874% H1 Total income 8.805540b vs. 8.224865b +7.060% H1 Claims and policyholder benefits [3.617066b] vs. [3.555123b] +1.742% H1 Net claims and policyholder benefits [3.607150b] vs. [3.549674b] +1.619% H1 Cedant acquisition costs [2.101120b] vs. [1.905152b] +5.399% H1 Total outgo [6.511216b] vs. [6.012590b] +8.293% H1 Profit before tax 2.294324b vs. 2.212275b +3.709% H1 Profit for the period after tax 1.622097b vs. 1.564088b +3.709% EPS 2.32 vs. 2.23 +4.036% Total Shareholders’ Funds 25.908013b vs. 24.133297b +7.354% Total Assets 40.736039b vs. 38.494310b +5.824% Cash and cash equivalents at the end of the period 5.459451b
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Kakuzi reports H1 2017 EPS +60.776% Earnings here Kenyan Economy |
Par Value: 5/- Closing Price: 320.00 Total Shares Issued: 19600000.00 Market Capitalization: 6,272,000,000 EPS: 28.7 PE: 11.150
H1 Sales 547.277m vs. 437.347m +25.136% H1 Gains arising from changes in fair value less cost to sell of non-current biological assets 20.000m vs. 19.054m +4.965% H1 Cost of production [460.210m] vs. [381.361m] +20.676% H1 Gross profit 107.067m vs. 75.040m +42.680% H1 Distribution costs [52.207m] vs. [53.978] -3.281% H1 Operating profit 58.477m vs. 23.829m +145.403% H1 Finance income 46.985m vs. 39.748m +18.207% H1 Profit before income tax 105.462m vs. 63.577m +65.881% H1 Profit for the period 73.203m vs. 45.388m +61.283% Basic and diluted EPS 3.73 vs. 2.32 +60.776% Total Equity 3.801861b vs. 3.323285b +14.401% Cash and cash equivalents at the end of the period 1.143772b vs. 731.663m +56.325% No interim dividend
Conclusions
Strong Results led by Avocados.
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N.S.E Today |
There was an interesting report carried by Bloomberg today captioned ''Kenya's central bank is taking an unusual approach to protecting its currency: intimidation'' “There’s a hush-hush rule on traders: Either talk up the shilling, or shut up,” said Kwame Owino, chief executive officer of the Institute of Economic Affairs. “This kind of pressure isn’t sustainable, especially when you have an open trading system. It will end in tears.” “What we need to ask ourselves is this: Will this escalate into a crisis and will that crisis lead to a very big slide? I fear that is what will happen,” Owino said. I actually disagree with Mr. Owino. The Shilling is freely convertible, this is the overarching point at a time when so many Countries have placed restrictions. I believe Remittances [which is our biggest FX Earner now] is in fact undercounted by about half, further supporting the Shilling. Therefore, I for one, see the Shilling whilst carrying a residual aysmettric downside risk [if we revisit 2007] will once again surprise as it has surprised all the Naysayers. Kenya Shilling was trading at 103.975 versus the Dollar. The NSE closed firm ahead of tomorrow's General Election. A win for President Kenyatta would translate into a further and sharp rerating higher.
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N.S.E Equities - Agricultural |
Kakuzi reported First Half Earnings where H1 Sales clocked a +25.136% surge, H1 Profit after Tax rallied +61.283% and H1 Earnings Per Share clocked 3.73 +60.776%. On 8th May 2017, I wrote ''Avocados [which are not in the commodity basket] have found an off-ramp and are at all-time highs'' The Kakuzi results were seriously juiced by the Avocado component of Kakuzi's product range. I continue to see Avocado prices in a steep price uptrend and therefore remain bullish the Kakuzi share price. Counterintuitively, after such muscular Earnings, Kakuzi traded 1,500 shares all at 305.00 -4.69%. Kakuzi is +1.94% in 2017 and has plenty of upside scope.
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N.S.E Equities - Commercial & Services |
WPP ScanGroup reported soft H1 Earnings where H1 Revenue clocked a 22.259% decline and H1 EPS declined -40.909%. WPP ScanGroup said in their accompanying commentary;
''The reduction was in line with budget and was driven by 1 Pan-African client significantly reducing their level of marketing spend across the region plus reduced scope of work with several other clients and with our core client in Gabon''
WPP ScanGroup closed unchanged at 23.75 and is +30.85% in 2017 and that looks stretched.
Bloomberg carried an article captioned ''Safaricom Sees Amazon as Model for Kenya E-Commerce Platform'' Known as Masoko, Swahili for markets, it will offer products ranging from electronics to beverages and cosmetics, and provide a tool for people currently buying and selling goods on social-media platforms such as Facebook, Director of Enterprise Business Rita Okuthe said in an interview.
“This offering will not be holding inventory and neither will it be an anyone-can-sell arena,” Collymore said in an interview in the capital, Nairobi. “Safaricom is carefully screening all the merchants before giving them access to the platform.” Okuthe said the goal was to become “a little bit more” than an African equivalent of Amazon.com Inc.’s Marketplace.
I have been mentioning that Safaricom was imminently making a move on E-Commerce and I see it as a Game-Changer. Safaricom closed unchanged at 23.50 and sits pretty at +27.78% on a Total Return basis in 2017.
Kenya Airways shareholders voted to approve a financial restructuring plan to create new shares and convert debt into equity at a special meeting on Monday. The plan is essential for the indebted airline to continue operating and return to profit, Michael Joseph, chairman of the board, told shareholders before they voted overwhelmingly to back the plan. Kenya Airways rallied +3.571% to close at 4.35 and was trading at limit up 4.60 +9.52% at the finish line.
Uchumi rallied +7.24% to close at 3.70 and traded 514,100 shares.
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N.S.E Equities - Finance & Investment |
Kenya_Re reported a +4.036% increased in H1 2017 Earnings per share. Kenya Re said ''The first half of 2017 has presented its own set of challenges with the most prominent being premium undercutting within the Kenyan market'' Kenya Re is a cheap share on a Trailing P/E of less than 5. Kenya Re rowed back 25cents to close at 21.25 on light trading
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N.S.E Equities - Industrial & Allied |
KenGen rallied +1.8% to close at 8.50 and sits +46.55% in 2017 and probably heads to 10.00. KPLC rallied +3.571% to close at 8.70.
Crown Berger [which is +78.57% in 2017] traded 1.626m shares all at 75.00 unchanged. Crown Berger trades on a PE Ratio 40.451, which is seriously excessive unless Crown is now an Amazon or a Netflix.
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