Saturday, February 21, 2009

NSE weekly catch up: you know the drill

Another week, another push south... This week it was supported by global sell-off (FTSE closed down 8% on Monday's opening). Geithner needs to start walking or he'll mess up the script for Obama.

Why would you do a stock spilt at the start or middle of a bear market? Despite strong numbers, strong momentum going forward, Equity’s announcement of a stock spilt has had the opposite of the intended effect. Its arguably the 2nd faux pax after the about doing a 2nd ipo for the principal shareholders. Apparently BDA was told or thought the idea was to make Equity less expensive. Jeez, are we NSE investors that stoopid? 142 is just a number just like 1. It only gets a meaning when you put an EPS or DPS against it. I think we are seeing the first signal that NSE has drained all the speculative retail investors leaving battle-hardened experienced investors who ignore noise.

BBK released FY08. As did NIC. Excellent results given its constrained deposit gathering capacity. PAT was up 39% on 2007 driven by 56% rise in F&C. It will give a 1 for 10 bonus share for shareholders in its books on 19th March. I would have been interested to see how the various parts did and especially NIC Capital, but I guess that will wait until annual report is on its website. NIC is a steady 30-40% growth bank doing things quietly (bought into TZ's Savings & Finance and obviously got the broker licence in ’08). Won’t surprise me if it comes in with similar growth for 2009. In terms of its peers, I'd now pick DTB, NIC and CFC in that order only because NIC still lacks NSE visibility.
Sameer Africa also released. It sells tyres. Therefore ceteris paribus, if car population goes up, tyre demand will go up. But it has to import most of its tyres so fx comes into play. It still managed to increase EPS by 5% due to “other operating income”. More at coldtusker. EABL released interims. DPS is Ksh2.50 equating to 4% yield.
Cheserem for CMA chair? I won’t say much, but this dude destroyed the best chance of ever catching Pattni & Goldenberg…

Kibz came in when NSE was circa 1,000. Will he leave it there when he goes in 2012 given that’s he seems determined to do that with everything else? Waiting is a virtual…

16 comments:

Maishinski said...

I see good things happening in 2009. Solid results from GOK:

1. Positive sentiments from Turkey. A good start. Much work needed though. I wonder how many visas we previously needed (if now we only need one) lol!

2. Iran President visit (he's coming with 100 businessmen - these are not small timers!).

3. Diplomatic & trade Relations with Qatar - the richest country in the world. Possibly the only developed country immune to the global crisis (they recently gave Aid to keep UK afloat).

4. Dubai? Perhaps not the best timing - with the massive correction thats looming there right now.

5. Scandals exposed - before thugs cover their tracks. An IMPROVEMENT.

6. Not forgetting: Capitalizing on Obama goodwill. This was like a bonus from God.

Good things are happening... these are signs of an imminent turnaround.

Let's fix our institutions (legal framework) so that we can be ready when the economic rocket takes off!

Maishinski said...

Oops! and Libya of course. How on earth could I have forgotten Libya?

The tour company that handled Gaddaffi's son's trip is "set" for like the next 2 years...

I heard he made it rain so much all peeps had to do was get close to his shadow for some paper to rub off.

Can we call these people for a ceremony and make them tribal elders? h$nt h$nt ;-)

MainaT said...

Lets be careful whose company we keep. And who is playing the piper. Some of these fair weather friends may not care how they get what they want i.e. the type that will fund kibz' election campaign...

coldtusker said...

Sameer Africa: They manufacture most of the tyres locally. They import only 'specialised' tyres & most raw materials.

Maishinski: Sorry to burst your bubble but Turkey imports (almost) zilch from Kenya. They want to EXPORT to Kenya. They want to give BUSINESSMEN visas to go shop.

Iran - Same thing. They want to SELL to Kenya. At best they import some tea from us. A fair weather friend.

Qatar & Dubai & Abu Dhabi - They are looking for places to invest. Yes, their money is welcome.

Libya - They gave kibz & PNU money for the 2007 elections. There is pressure on kibz to repay the favours.

coldtusker said...

I will blog on what Kenya & Kenyans needs to do to ride out the crisis.

Maishinski said...

@Cold Tusker,

It is immaterial whether they want to sell to us or to sell to them.

Of course everyone is looking out for their own interests! Thats what bilateral and trade relations are all about.

No one is going to "spoon feed" us - we need to take charge and negotiate deals that will improve our position, without giving undue concessions.

Let's recognize and stamp out this culture of handouts (expecting favors from others).

We shall always be poor - unless we learn to play the Capitalism game the way it was meant to be played! See the business opportunity, strategize, negotiate, and get results!

MainaT said...

Maishinski-ordinarily I'd agree that its good we are getting attention from these countries. My problem so far is that I don't see what we are getting in return. Bigger than that is the old man is the type who would sell Kenya for a song. He doesn't care about his legacy. Only getting thru. That is a scary thing.

MainaT said...

I'd like to see deals that are phrased along the following lines. We'll get preferential treatment for some of Kenya's produce in return for say buying oil from Iran.

Maishinski said...

Preferential treatment? Why?

In every negotiation each party needs to be aware of it barganing position.

The strongest negotiator is the one who can walk away from the deal - unscathed.

What do we have that Iran cannot do without?

MainaT said...

Maishiniski-this is my exact pt. I've never seen any deal that favored us in any way done by this old idiot. Look at the Libyan deals. What did Kenya (note- not Kibz) get in return for giving Libya preferential bidding terms on Grand Regency and the Oil Refinery?
Or for giving China preferential tendering for all road constructions?
I want good things for Kenya but not via deals signed by kibz...
I have no issue with France Telecom buying competitively into Telekom Kenya, but I've absolute issues with giving some of our prime land to Qatar.

Maishinski said...

MainaT, I hear you. My questions to you are:

1. Have you looked at this issue critically (pros & cons)?

2. Are your conclusions supported by objective analysis?

A parable for you: Have you ever observed a dog protecting a bone that it doesn't even eat? Provided other dogs want the bone - it becomes important. else its neglected.

Let's look at each point in turn - and try see beyond the politics:

1. Lybian deals.
- Grand Regency: It is factual now that the amount paid represented the best offer with lowest risks. Timing was right too now that we have the Global crisis. If this deal had not happened, GR would be valued like scrap right now.

- Oil Refinery: Don't have much info there - what workable alternative deal did you have in mind? Remember this refinary was obsolete - only a "Mr. moneybags" like Gadaffi would pay top dollar for it. What alternative did you have in mind?

2. China:
- You know the west has been screwing Kenya for ages. Some people suspect that the west funded / coordinated PEV. It is well a known fact that some western governments have been known to train dissenters (or give information) on how to destabilize governments - in order to achieve some ulterior objectives!
- China is not just a business alternative - its a political alternative.
- China, India, Gulf States are the emerging global super powers.

France Telecom: You said Kibz hasnt done any good deal - then you say France telkom is a good deal. On what basis is it a good deal? What differentiates it from the others? Or is it the lack of bickering by politicians (maybe everyone kulad something)? Hmmm.. Am I seeing a western bias?

Qatar: Classic case of dog with bone. When did we realize that this so called "prime land" was prime?
- you know Gov didnt give out this land. Even MPs endorsed the deal when they scrutinized it.
- you know people are starving in Kenya - despite having prime land.
- you know that the so called prime land has been idle for more than 50 years!
- you know there's no party that proposed to use idle land during General elections.
Why is this piece of idle unused wasted land suddenly of value? Because Qatar wants to use it.

I cannot even start to quantify the potential benefits of having good relationship with Qatar. even western nations bend over backwards for Qatar! I honestly think Kibaki was a Genius in this instance!

I dont like some things our politicians do - but let's try and judge them objectively.

MainaT said...

Maishinski- This is the sort of discussion that makes me blog.
Now lets establish some principles. Do you believe that the end justifies the means? Because if you do, then clearly I can understand where you are coming from in this. Do you believe that the rule of law is a necessary for a sustainable Kenya yani its survival? Because once we start disowning institutions we end with RAO asking for foreigners in everything from football to eck chair, to president.
Anyway,
GRH would not of course not be scrap now if the deal hadn’t happened when it did. Indeed, the fact that it was done when it was done is neither here nor there. According to you, the next time we do a deal where say we sell half of the beaches in Mombasa to some German billionaire, it’ll be okay because it is a great deal. For me, public property as GRH clearly was having been attached as collateral to recover Pattni’s thievery, has to be disposed off in accordance to the Public Procurement Act i.e. via an open bidding process. We can not have deals being made where Libya gets first bidding on public property in exchange for monetary support to the old idiot’s campaign. Public property.
On what basis did you know that the oil refinery was obsolete? Again, why couldn’t it have followed the process through which Essar won the bid.
France Telecom: was a deal in the sense that the others. It was fully bidded process where some of the world’s largest telecom companies bid for a deteriorating business and won.
Qatar: on the basis of your argument, there was nothing with the colonialists who signed funny deals with chiefs back in the early part of the 20th century. Correct?

Maishinski said...

Aaah.. now I see where you're coming from.

Yes we do need more openness/transparency and in the deals involving public property.

Yes the rule of law must be sacred and impunity must end in favor of institutions.

Yes public deals must be open to debate on whether they are for national interest.

Yes some of these deals are being made in a "big chief make deal with foregn man" manner & yes that sucks big time.

Hmmm... Having shifted my perspective, I do believe that we have similar views - just that we have been looking at it from different angles...

Cheers!

Maishinski said...

...now I ask you to shift your perspective a little.. just for a moment.

1. Do we have a culture for *rational* debate on national issues?

2. Do people debate with national interests in mind or do they debate on the "hata mimi nataka 10%" angle?

3. Do our politicians - the people's representatives - have any ideology? Do they have true patriotism? Do they care about the ordinary people?

4. Suppose Kibaki was pulling the singapore stunt. i.e. A benevolent "dictator" making good deals for his country - while everyone else bickers? Remember he is an economics "genious".

5. Have you factored deliberate sabotage by parties which dont want other parties to be popular?

6. Do you know that GR was being run down and was being looted left right and centre?

7. The petroleum refinery is due for a major upgrade. Most of it is obsolete. This is common knowledge. But I can get some supporting references if you doubt it.

Sometimes dictators do good things for their people. Singapore is an example.

MainaT said...

Maishinski-the benevolent dictator would apply and I do agree that some dictators do some good things for their peeps (btw, I can only two at a push Singapore and Rwanda).
But Kenya is a democracy...or aspiring to be one. And the reason why the debate hasn't gotten to be rational yet is that many of us don't think as a nation. 2ndly, many don't how to distinguish between political and national debate. I don't do political debates when it comes to Kenya because there is no real ideological diffs between the parties.
We urgently need to have debate or agreement on some salient issues. The most important being that we must have laws that equally apply to everybody and are respected by everybody. We have a public procurement act that is clear on disposal of public property.
GRH, Oil Refinery. The issue is not what their condition was. Its the manner of their disposal. The oil refinery went through a tendering process which Essar won. Only for the "desert tent" deal to be brought to bear.

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