Rea Vipingo announced PAT up 46% on one-off gain from acquisition gain for year ended Sept 08. Removing this one-off gain, shows PAT was flat vs last year. Turnover was 10% higher so its not exactly a growth story. DPS was reduced from Ksh0.80 to Ksh0.20. Investors have downloaded the share this week in disappointment.
So what to make of Safaricom's plan to issue a bond (I doubt if banks feel bold enough to do a syndicated loan)?NSE's initial reaction has been to punish the share with price nugging Ksh3.00. But an investor should explore the possible impacts so as to price the share correctly
a) If its a revenue generating e.g. to acquire bolt-on internet knowhow ahead of fibre optic or for network capacity or capability enhancement (I keep hearing Mpesa is getting teething network issues). This will be positive.
b) If its a defensive move e.g. to roll current debt; enhance cash flow or mere repair to network. Then its a negative because the jaw effect will be narrowed (revenue is under pressure).
Macro view: Uhuru Kenyatta's appointment probably wasn't what the NSE was looking for. Firstly you ask yourself what kind of finance minister would you expect as a minimum:
- Qualifications related to finance (accounting, banking, insurance, CFA)-political science graduate
- Experience of finance and or business- no finance experience but run's father mammoth businesses (?)
- Knowledge/familiarity/ appreciation of IT- nothing suggests he doesn’t have average IT competency
- Specifically for Kenya, strong anti-corruption and dynamic credentials- he is establishment thru and thru and only seems aware of Gatundu...
One hopes we can all agree that our economy performs better if:
- Corruption is low/ered
- Rainfall is average or above for the time of the year
- And global economy environment is benign (tourism, FDI and remittances)
Those 3 are currently absent so you have to hope for a strong dynamic anti-corruption fin min. Mmmh…As for Muhinga, I said that if he was cleared, he should have his job back. He wasn't and that says it all.FTSE: Bad economic data (unemployement just under 2m); recession confirmed has turned heat on the banks this week. Barclays was near 50p... Funny story about bad cost averaging by one of its directors.