Friday, July 25, 2008

Equity exceeds high expectations, NMG, Safaricom

When we were doing our maths over at stockskenya, we all agreed that having done Ksh35bn of Safcom IPO, that alone would give Equity around Ksh1bn additional income (commission and interest). We then added Ksh0.7bn (which it got for Q1) to give us around Ksh1.8bn for half yr (i.e. similar to the whole of 2007). Equity tramped that and did Ksh2.5bn after tax. Any concerns? I hope the non-performing loans are conservative because given the state of the economy currently, these may yet rise unless GoK can successfully be able to reduce inflation without interest rates rising to growth-reducing level. Shareprice comment, the press announcement didn't mention dividends or a bonus/spilt shares. Thus price may coincidently not rise by as much as it would have even though the annualised P/E is now only 22. I think its a good move not to increase the liquidity of the share currently. I hear there might be a listing at USE.

For once, NMG has been left behind and is only now updating its website. The new look is ok although I notice it seems to contain fewer stories than the previous effort. Still, welcome to mid-2000s Nation.

Safaricom is now in my range as I think the supply coming from FFIs has been milked out for now and the share won't fall further unless Econet and Telkom do very successful launches of their services in the next few weeks.

8 comments:

bankelele said...

It's amazing that just two years ago, banks and giant companies were celebrating the billion shilling profit mark - now the billions are raining down like confetti on a quartely basis.
- On Equity, the directors window for selling shares is about to open

MainaT said...

Banks- I am very comfortable that the lock-in clause will have minimal effect apart from shaking out speculators.
Equity is an on-going IPO.

bankelele said...

Oh I meant to add that NMG celebrated it's billion mark in 2006
- rumor that CBK will require the directors sell to comply with the 5% rule on ownership [they got an exemption at time of listing]

MainaT said...

The rumour is true, but this only affects Mwangi (he mentioned it himself earlier in the yr). I don't think he'll float them i.e. he'll probably find somebody to buy them from him as a block. Fortress Highland Ltd...

What do you think of Nation's updated website?

coldtusker said...

After the Helios & UML deal... Mwangi may be below the 5% ownership requirement...

phantom77ish said...

I agree with you, but am still unsure about Safaricom. Morgan Stanley have been lumbered with £2.6 billion worth of HBOS rights issue stock to place in an unwilling market and I feel they might be tempted to dump more of that rumored 40 percent of Safaricom that they still have in their books.After all they raised eyebrows in the square mile when they took a 2.3 percent "short" position on the HBOS to limit their exposure.

MainaT said...

CT- Mwangi held 5.49% after Helios as of Dec 2007 (page 28 of annual report), but you are right this might be reduced if Equity gives the 3% to UML out of its current shares rather additional issue.

MainaT said...

Phantom77ish (interesting name)-MSI has aused this IPO to drop like manure so I won't be surprised if its contemplating reducing its holding further.
On HBOS, what a fiasco? I am not sure why it didn't just go looking foir sovereign funds like everybody others have tried to do. Once RBS did a £12bn issue, the Square was dry...