NSE sectors stock pick for July and the 2nd half of 2009

As a generic comment, NSE is now some 35% higher than its low of in March. Therefore, value for money stocks are gone. 2ndly, I suspect that given foreign interest of late (posting net inflows and I think almost accounting for 57% of units dealt), a correction of around 10-15% is on the cards between now and October in keeping with the worldwide correction. Finally, we are not going back to last June's 5,000 level in a hurry. Idea should be to look at price over the last 9 months and compare to today. The nearer today's price is to peak over the period, the less the potential gain. Why? Fundamentals in Kenya are worse now than they were 9months ago.

Agriculture sector: Tea companies will benefit from current dry spells in pretty much every South Asia country especially India and Sri Lank (Kenya's tea rivals). Primarily, will benefit from valuation of biological assets. Your pick is from Kakuzi, Kapochuria and Williamson (the latte two are one and the same and I am not sure why they haven't merged). All three have already been noted and have hence been rising steadily. Best time to buy is once they are xd and well before the annual results are announced. I'd normally class Mumias as an agri stock but the power co-generation changes matters somewhat. Pick is Kapchorua, although it'd have been Kakuzi whose operations I'm very familiar with but it has corporate governance issues for days.

Commercial and services sector: Easy one. Safcom. I think it has 30% upside over the next 12 mo0nths. Compe in the mobile telephony market is in disarray once more with Zain up for sale, Orange changing CEOs and Econet, being well, Econet. Interestingly its trying to buy up programming and software capacity. Expect multi-media offerings. And of course, MJ is leader of TEAMS. I won't MPESA as this remains on licence to Vodafone, its parent. AK is now the most expensive share on NSE, otherwise would have been my pick at Ksh20 or lower. ScanGroup will suffer from Zain and others slowing down and general macroeconomic conditions. Pick Safcom.

Finance sector: Equity is till the stand out stock in this sector. It has lead market share at the NSE, will be very competitive in Ug and is expanding into Rwanda and South Sudan. DTB has a similar strategy in TZ especially as does KCB in the same countries as Equity as well as TZ. What distinguishes Equity from the other two is
· Strongly capitalised
· Historically nimble and able to grow from a low base (necessary regionally).
The other banks share to look out for is Stanchart. It has just completed purchase of First Capital (additional fees income loan arranging and any M&A activity) and will mostly certainly benefit from the forthcoming bond glut without any potential downside from bad debt write offs. Added benefit is its high dividend yield.

Industrial and Allied: Sector in a tricky time (fuel costs higher, anaemic export and domestic market). Stocks that will do well have already appreciated or stayed fairly steady during the bearish period. This sector is probably the hardest to gauge. Clearly, its hurting because of the perfect headwind combination of fuel/localised inflation and the macro conditions (anaemic export and domestic demand). Look for utility or utility like operators. But do note that KPLC and KenGen will suffer from the short rains=lower power generation=power rationing spell. So EABL is a utility-like monster with deep pockets and looking to expand regionally. It does look expensive on the basis of the last 9 months though. Maybe EA Cables, but it had issues as early as January. Mumias and co-gen? Maybe, but I have been unconvinced for a long period.

Avoid sector: Olympia should be fairly self-explanatory. I think it might another Uchumi in the making. Except it has no redeeming qualities. KQ, please google Virgin and BA to understand the dire straits this industry is in. I think oil prices will stay at current and lower prices over the next 12 months mainly because of the wider economy.

Portolio- 6month retrospective

This was me in Dec, I am here today:

Kenya:

Equity-remains unchanged. In any case I've now got many due to the spilt. Didn't really take advantage of the low of Ksh93, but would if it came around again. I like the focus on on augmenting regional income to 40% of total in the next 3-5 years.

Access Kenya- added some at Ksh20 and some at IPO price (was just great to see at that price). My average is now a healthy Ksh16 ffrom almost Ksh25 at one time. Will hold for a couple of years in the hope it get s bought.

Cash- still keeping some for any really attractively priced share.

Overall NSE view:

For anybody that was trading, the first half has been fabolous hunting ground on the NSE as I will show in a later post. My gut feel is that there isn't much momentum for the 2nd half of the year due to the bonds, possible IPOs (Consolidated, NSE are both slated for this year as is the bread maker) and I get a feeling that El Nina might be on the way.

Uganda:

Interested, in expanding portfolio from just Clay.

TZ:

DCB is a hold for a few years. In any case,I'll have to go to TZ to liquidate.

Zambia:

Sold Pamodzi Hotel at an fx loss of around 25%. Very illiquid share that I had bought with the thought of getting some kind of share spilt. Wapi.

FTSE:

Opened share trading account in earnest. Hoping to stay there until results season in 2010.

March and April were the wow months. Got via Barclays in mid-March doubled up in a couple of weeks, got out; got in again made another 50%. Jumped to RBS made similar.

May was the ouch month. Lost half my gains while pretending to be a day trader, full-time busy office worker, parent et al.

June was mostly boring until the last week. Up 5% down 5%. Very tedious especially when you are trying to get back to buy and hold.

Have learnt a similar amount to what I learned in 5/6 years at the NSE. A bird in hand is better than two in the bush; stock markets are legal pyramid schemes; get in when no one is interested; ignore broker recommendations; be fearless in buying and ignorant of past sell decisions.

Looking forward: have been tempted by China, oil, efts and will bite one of them. Plenty of other investment opportunities though the window is closing rapidly. Great business ideas but to need create time for them.

NSE Weekly catch up

NSE stayed flat this week as other markets motored forward. Mainly I suspect that Kenyans are not feeling the bourse like prior years. Cash I think is there, but we all need to see a more convincing political and economic forecast. Stock investment is about hope.

FY Results:

Eagads a coffee and tea grower, saw a vast improvement in turnover but also benefited from Ksh20m gain from revaluation to record profit for the year. The cash flow statement looks peculiar to say the least with cash from operations somehow going down by Ksh12m. No dps.

Kenya Orchards, reported a Ksh7m loss for '08 on the back of a Ksh10m operating loss whose detail is not given and 26% decline in turnover. Cash from operations was massively in the red presumably relating to the operating loss issue but overall cash was positive. No dps for the year.

Q1 Results:

KCB opened the Q1 show with a 3% PAT growth on prior yr. I have switched my remaining stake in KCB to AK on the back of results which were a puzzle. Like the fact that annual reports will be emailed to shareholders in future though.

Finally, HFCK is showing the potential one suspected it had. PAT grew by 1.5 times on prior year driven by massive growth in loans. I suspect Kenyans are switching from NSE to real estate in a big way and HFCK has really aligned itself to take advantage of this. Still not sure how Equity intends to help HFCK leverage on its brand and network but this has to be the way forward. HFCK has been very innovative in terms of products and distribution. One of the products out there is its Makao project management which I'd recommend to NRKs.

Rumours:

AK is a takeover target.

Macro:

Its either the supplementary budget got in the way of UK's serious imbibing time or the fruit never falls too far from the tree. Excellent work by MARS though.

FTSE & other markets:

Turned green for the first time this yr yesterday. Risk appetite is back. Dudes are unhappy gettting 1-2% savings rate. Plus depression, swine flu et al have all been overhyped so that when reality hits, there is relief. And this is the result.

Great leakage work by Tim Geithner on the stress tests. The numbers were no different from those reported by FT almost two weeks ago.

NSE weekly catch up

Market slowed down this week as the bear rally came and went. Is averaging down a investment strategy that is hugely propounded on our bourse an emotional feelgood strategy or investment nonsense?

Results:

AK came in 65% higher than 2007 with increased corporate clientelle and also expansion into the residential market. 2009 will the blockbuster year for this listed ICT firm. Once fibre optic lands, the game will change because revenue per client will come under challenge from compe and the firm will thus need to significantly increase its client base. Ksh0.4 DPS awaits the lucky shareholder in the books as at June 18th. IMHO, this will be one of the shareprice performers of 2009.

Pan African Insurance was driven to distraction and Ksh100m loss by its associate investment company. Significant challenges ahead though its trying to diversify into property.

Standard Group, the mother and father of distinguished gems such as KTN, Standard newspaper et al clocked 19% PAT growth driven by 8% turnover growth. Cashflow remains negative therefore no DPS. Going forward, the group is targetting the launch of a radio station in Q3.

Macroview: UN has increased its food aid plea for Kenya. We are well into March and the anticipated heavy rainfall season remains patchy at best.

Other markets:

Excellent week at the FTSE. We have our first black CEO in the FTSE 100! Tidjane Thiam, a former Ivorian Coast cabinet minister will head PRU, one the largest insurers in the world. And Barclays is up on last week :-)

Have you invested in LUSE? Do so to take advantage of future higher copper prices.

Will Geithner last? Because the way I see it, its either he shapes or goes or Obama will be a first-term goner. The global economy doesn't like a rabbit in the headlights Secretary of Treasury...

The Gartman Letter has been whipping WB black and blue this week. Not happy with the credit rating downgrade and reckons Berkshire Hathaway is an overvalued stock. That is on a 5yr low. Still, I think WB has proven himself.

NSE weekly catch up: Results season kicks off

If you were looking to buy to take advantage of capital growth induced by the results season which kicked off yesterday until end of March, then you may well have missed the bus on some shares:

Equity was up 22% from Monday and there was this intriguing foreigner sale which no Media house or broker seems to have commented on...
AK was up 12% and has a lot of momentum for the rest of the year in my opinion
EA Cables was up 11% and is another (together with Centum-up 10%) which I see having a solid year shareprice-wise
Unga with results already out and its 1 for 5 bonus issue closure day behind it (30/12), will probably slide slowly (down 7% since Monday).

AIM corner:
Any prospective shareholders of Limuru Tea? I forgot to mention that the Tea firm (which now belongs to Brooke Bond given Unilever had a 54% holding), is doing a 1 for 1 bonus share issue. For which the books closed on the 18th of Dec :-(
However, City Trust (minority shareholder of fast rising I&M bank), is also doing a 1 for 10 bonus share issue and this is still open.

AOB: Nice of Reuters to highlight what a miserable yr 2008 was for us NSE investors. Not sure though where BDA got its 3.3% rise for Equity in 2008 (opening price was Ksh150, closing was Ksh176).

Macro view: I still read press reports that peeps are not getting the cheaper Ugali, so who is? Hopefully, we'll get a decent finance minister this year though that will have to wait for the old man to wake up.

Happy 2009: some predictions

Investments
If you were to go from the Lenana peak at the top of Kirinyaga Mountain and walk across to the top of the Aberdare Ranges, that would give you perfect feel for how most stockmarkets will move to 2010. Assuming Q2 2007 to be the Lenana peak, I expect:
NSE- will not go beyond 4,500 weighed down by economy morass and newish listings (KPC, KenGen, NSE, Nakumatt, DPL Festive)
Access Kenya, Safaricom, Equity in that order will be top performing NSE shares in 2009
FX: $/Ksh will close below Ksh70; £/Ksh will close at Ksh115-20 both driven to the floor by arbitrage
LUSE: Has lost almost 30% this yr primairily driven by foreigners exiting but will stablise in 2009
FTSE: Will not go beyond 5,000 as unemployment, company defaults, housing depression continue to depress

Economy

Inflation: Will be re-calculated but reality is that it'll remain very high unless rains are very good
Economy: 4.5% growth will be recorded for 2009 i.e broadly similar to this yr, the result of lower international receipts, inflation espicially fuel an electricity.
KRA: will miss it target for yr.
BoE rate: will close at 1%
UK unemployment will rise to 3m

Politics
Different yr, same BS

• The local tribunal will get bogged down from the start. The investigations will clear most of the "10" for lack of sufficient evidence.
• Constitution review will get stuck on the same two issues namely parliamentary/presidential system (excellent explaination of the diffs) and devolution (or is it ujimbo/ugatuzi/ukabila/upuzi?)

And finally, Liverpool FC will win the Premier League in May.

2008 Investing Highlights

This was me end of June, this is me today:

Kenya
Sold: In the money (NMG, TPS, ARM, NIC) & Out of the money (BBK, EA Cables)

Reduced: KCB

Switched to: Equity, Cash

Hold: Equity, AK, miniscule KCB (2,500 shares) & Safcom & Cash

TZ
Bought: Dar es salaam Community Bank

Zambia
Bought: Pamodzi Hotel

Theme has been to move from diversification of risk to concentration of gains. Has it worked? Yes and would have been even more fruitful if I had kept to one of my golden rules of never adding more shares unless the price of the said stock is lower than my average cost so far. I got punished for buying AK at Ksh33.50 thus driving my average for it to early 20s and Equity at Ksh301 and Ksh250 thus driving average to mid 120s.

Overall for the year: average i.e. below 30% gain. Had to rush out of BRIC nations just to stay in the money and NSE has been so-so but thankfully my offloads were all in July/Aug time.

Other investment decisions:
Good ones: Missed out on SIB’s private placement. Having opened a trading account and just about to send the funds to buy some shares at Ksh120, I once more request ed a copy of its accounts. Still not received even today. In the meantime, I now hear that the initial placement failed and subsequently the shares were retailing at ksh30!
Tough ones: After sweating to set up the investment club, I decided to move on because of strategic differences. So why I my still blogging as KCIG? Investment club changed its name.
Bad ones: Hesitated when was Equity was Ksh116…

Investing resource: Thanks Aly Khan for the live prices streaming. Some of my last minute price adjustments relied on the live feed.

Key learnings: Self-discipline, early bird mentality and thereafter liquidity and investors confidence are the key ingredients that turn good company/market fundamentals into investor bounty.

Wednesday shorts

The forthcoming era of fast internet connections continues to garner interest from all. Its one of the reasons I fear for AK. Internet provision like mobiletelephony is initially expensive to provide due to high capex, but the revenue generation afterward is phenomenal. You lay the network and then chop it up into small bits that you mass market in such a way that you cover the amortised capex, staff pay, generous bonuses and maintenance costs. The rest is profit...And who is very good at mass marketing in Kenya?

I like this article's question on how World Bank came up with its Ksh70. The measure requires context and also has to be dynamic because today Ksh70 is not much for a day's spend.

Bolt by name, bolt by action! I've taped that 100m so I can re-watch again and again... Its the equivalent of the first time I saw someone patting a lion.

NSE-are we out of woods yet? Most likely until Co-op IPO comes along. Last week's recovery was not unexpected given that investors had oversold, but the issues remain. Supply and demand are still looking for equilibrium. In the meantime, I have Equity, KCB (by end of next week we'll which way with supply), AK and NMG on my stockwatch.

AK "average" at 38%; TPS unsurprisingly down

AccessKenya announced distinctly average first half. Although sales were up 76%, cost of sales (which in its case would presumably be bandwidth) was up by a humongous 160%. Financing (basically interest charges on loans and overdrafts also increased by Ksh16m). Overall PBT grew by 39%. Removing the effects of the first two months but adding introduction of residential broadband and in an exponentially growing industry, the numbers are distinctly average. One wonders if AK will do a "ScanGroup" ahead of the introduction of undersea cable. My reasoning is that cash-rich businesses will do well in grabbing market share especially the crucial residential and small business sector and unless AK wants to come back to the market and do a rights issue, I don't think the Ksh400m it raised last year will go far...I've got it as a hold or wait and see counter.

TPS' numbers were not surprising. Most hotels had 20% occupancy rate in Jan/Feb and even March for some. Given that most of its clientele is still very upmarket, the results are very much in line and the shareprice for the last 2/3 months has moved to reflect that. Its still a good medium/long-term buy because if Serena can't manage in this industry nobody can.

NSE Stock Portfolio: 6 months into 2008

Generally, I haven't traded much this yr, not because of lacking opportunities, more because of a busy schedule elsewhere and an evolving strategy. From buying and holding for the whole presidential cycle, I am now more inclined to buy, and hold as long as the stocks are meeting the short-term mini-goals i.e. FY profits etc.

Bought:

1. During the January clashes: Equity@125, TPS@58 and Barclays@65
2. Nation Media Group@326 just before it announced its results
3. A few Safaricom during the IPO

Switched: after its Q1 results, sold-off my whole Barclays portfolio and switched into Equity@250 and Access Kenya@33.50

Overall Portfolio: Also includes ARM, KCB, NIC and EA Cables.
Overall trading from H1 2008: Very good returns....

Running the ruler over:

• Nation Bank of Kenya
• Safaricom while waiting to see if it'll get cheaper than ksh7.40.

PS: The above is my own personal stock-trading account. For KCIG, we outperformed the NSE for H1 2008

NSE catch up

There are many good reasons to still buy some NMG shares. There is an additional one with when one has a look at its investor briefing . Having young leadership should make its mark on a business and I hope I don’t speak too soon when I say that 18 months after his appointment that started off with nation-gate, Linus Gitahi is making his mark on NMG. It has a very clear vision “Media of Africa for Africa”. Clear leadership is also being seen at Business Daily. Yes it’s had its goofs, but even at Ksh50, I had to get a daily copy when I was home. Nation despite being the victim of usual anti-kikuyu BS, has on someday something like half the content as adverts. The job supplement looks like NMG goes picking anybody who wants to advertise. Over 3-4 years, one can’t go long on both capital (share appreciation growth) and income basis (one of the best DPS at the NSE). Placed alongside SGL and Scangroup as media-type stocks, NMG is still way ahead.

The fate of KQ should now become an issue of national concern to rank alongside the direction of KMC, KPA (IPO-please) and KPL. In retrospect, Titus Naikuni, KQ’s CEO joined KQ (Feb 2003) when the hardwork in terms of getting on it a profitability curve had already been done. since things started astray at KQ, he has tried typical MBA-speak things i.e. sacking a manager here and there; closing off some business routes, dismissing big accidents and mishaps (135 for last year). Continually however, all I hear from any of its passengers is “never again”. Isn’t it time the buck stopped at the CEO’s desk?

It is entirely correct that questions have been asked about Equity share price and the extent of insider trading. It does happen at Equity, but its very widespread at the NSE and even the UK, National Bank’s share price went to 60 from 40 last June prior to Kimunya confirming GoK’s paying off Ksh20bn debt. Other classics are EA Cable, BBK to name but a few. The UK's FSA suspects that upto 30% of M&A deals have some insider-trading going on. The problem is far worse for Equity because some of this negative press overshadows what is a remarkable performance by a “made in Kenya for Kenyans” solution to banking. I was shocked to see that Equity is financing Access Kenya’s shareholder offer of home-internet. Equity offers a variety of loans to the one group even I fear lending to. Small-scale farmers. And so forth. The moral of the story is that investors must buy on fundamentals alone and do so for medium to long-term gains. When you have BBK on a P/E of 20.42 despite PAT growing at annual rate of 8%, then buying Equity at a forward P/E of 21 looks cheap even at current prices.

And whatever one can say, buying HFCK at anything over k35 (i.e. P/E of 54) is not fundamentals-based. Yet.

I like the look of Access-Kenya. Pre-2007, the group had less than 1,000 corporate clients (this is now just over 2,000). On the back of this, its doubled turnover and bought some interesting players into the group and having had the measure of the market (40,000 corporate clients in Kenya and only 12.5% have internet; something in the region of 325,000 households that can afford internet and only 5% have internet) are now set to take advantage by investing in fibre-optic at source and its delivery to end user households. Still, its website isn’t exactly the best even in Kenya is it?

A short history of Kenyan IPOs: Lessons and reminiscences

KCB: Listing price Ksh20 in 1988. Suffice to say that if you were shareholder in 1988,you most likely would have lost your hair but made good evenutally as the stock is KSh24 (after many rights, additional divestures and spilts). Was the 1st GoK privatisation.
NBK: Listing price Ksh10 in 1994. Even with a 2nd GoK divesture in 1996, has posted 400% returns for IPO investors despite its dismal perfomance profits-wise. Thanks Jimnah.
Kenya Airways: Listing price Ksh11.25 in 1996. Its IPO was the Safaricom of its day and has salutary lessons for us all. Its listing in 1996 saw 110,000 new investors (was a huge number in those days) and was the first by an African Airline. Within no time and helped by Goldenberg, drought and moi-economics, the economy was in ICU. KQ's shares went down to KSh6 andwere stuck there for a spell. Investors slashed their wrists and vowed never again until KenGen IPO came along.
KenGen: Listing price Ksh11.90 in 2006. This IPO ushered the new era of NSE complete with CDSC accounts, investors increasing to 500k+ and was the first IPO I took part in. Perhaps due to the absence of IPOs for along-time, lessons were learned by all
                
                  *Don't make IPO a free-for-all, you'll end up high investor expenses from annual reports, AGMs and                     the like
                   *Share price will stagnate due to liquidity glut
                  * Do price it low
                  *Every investor will see profits and jump, cue oversubscriptions and interest-rate earning for brokers

ScanGroup: Listing price Ksh10.45  in 2006. With lessons learned, guys jumped and made a mint (some 300%). The share still has way too many investors. I have cashed out after getting frustrated about the stagnant price.
Everready: Listing price Ksh9.50 in 2006. A lemon among the recent IPOs. And most knowledgeable investors new it before it listed and thus went in for speculative purposes. Its high lasted a month before plummeting below IPO price where it has refused to come away from. I sold at around KSh18 for one my cdsc account and was flat on another due to lax broker nonsense.
Access Kenya: Listing price Ksh10 in 2007. Although I've made more money from others, this one I am enjoying because it has something of a schedenfraude about it. Firstly, many trashed it on the basis of the forthcoming fibre optic and Telkom's takeover by French Telecom. Secondly, the upside is so huge that I won't be surprised if it reaches mid 30s by next year. Beyond that, it's all about how well it adapts to increased competition, but I am sure it will.
Kenya Re: Listing price Ksh9.50 in 2007. Companies were now wise to the ways of retail investors and restricted their participation. This has ensured that the upside seen in the share has stayed as institutional investors are long-term. But will that last if KRe doesn't change its pre-IPO ways and given this Jan/Feb claims? I am still holding a small portion though I may dispose once I get a dividend for 2007.
Safaricom: Listing price Ksh5.00 in 2008. I hope many can see a pattern emerging in all the preceding IPOs. So judge Safcom as you'd any other share. That way, you'll invest on the basis of its fundamentals which will either look strong or weak. If you think it's strong, why buy for speculative purposes only to go for it later when it might have doubled in value? If you think its weak, then you better review your exit strategy once you know the allocations and especially for the QII and foreign investors. As well as the cabinet composition. If either or both has  massively oversubscribed and cabinet is kosher, you are in the money . And out of the money if v.v.

What stocks I my investing in

Shanga has asked me what stocks I'm investing in at the NSE. Firstly a general comment about the current stock-investing environment. Its tough worldwide. Reason. Hotmoney aka money from western funds; sentiments about the US economy and of course, credit crunch are all making guys run around the world stock markets like headless chickens. Thus making quick bucks is not an option. In some markets, only risk-takers and those with a one yr+ view are buying.
As for the NSE, the positions I've taken so far this yr have either been based on companies with long-term prospects or for defensive reasons. By defensive I mean averaging. I haven't sold anything yet this yr because apart from Equity, the others haven't reached fruition and I believe they'll.

TPS- Because despite the tourism issues and the fact that 67% of its revenue is from Kenya, nobody does hospitality better in the whole of East, Central and Upper Southern Africa than Serena.
Athi River because it has a good base to go forward. And its not exclusively dependant on revenues from cement.
EA Cables, because Mugo the CEO is not yet 40 and has plenty of good ideas

1. Fibre-optic to take advantage of TEAMS, SEACOM and other under-sea cable projects coming online from 2009 onwards. And of-course, copper is expensive
2. Regional expansion. Most of its turnover growth for 2007 came from outside Kenya
3. Linchpin of Transcentury, therefore has strong shreholder support
4. Any price below Ksh40 is a buying ooportunity for this stockDiamond Trust because trust me its going places.

Barclays for defensive purposes and also because its very tempting when its under Ksh65 as it was a
few weeks back. EABL for the dividend tu.
On my watchlist remain AccessKenya and KCB.

Kenya to list bond internationally, AccessKenya IPO

Although minuscule in comparison to normal paper being floated in the international markets, the fact that Kenya is thinking of venturing into the international bonds market is worth a mention. Before that, what, why and how-type questions will be asked. How are bonds listed internationally? What is the rationale for raising funds internationally? Why not continue raising funds internally-after all there is plenty of liquidity in our economy?

• It is to help maintain domestic interest rates and insulate the private sector from the crowding out effect e.g. banks preference for buying t-bills instead of lending
• To increase marketability and liquidity of govt bills-the flip side is that the type of investor who will buy these will be hot money taking to the hills at the slightest sign of risk. It does however mean that the risk of default is reduced by entrenching a tighter monetary policy so no more 1993 level of interest rates...
• To create a benchmark for our corporates to raise funds in the same way e.g. KenGen who need to fund more electricity generation projects
• To raise the profile of our economy-my favorite one as Kenya would get a credit rating from the likes of S&P, Moodys and so forth and would get a regular SWOT analysis of its economy
• Typically international bonds are long-held and used to finance big infrastructure projects e.g. roads
• Is it to raise funds away from domestic eyes/pressure-quite clearly this is a real issue as you may not necessarily budget for it?

AccessKenya IPO kicks off tomorrow and I believe it will be oversubscribed given the size of the issue and despite the careful choreography of allocations. Is it worth investing in though. AK has 32% of the corporate market, and will be re-investing just over half of the raised funds into VOIP and other residential related products. There is also talk that it will be looking for some bolt-on acquisitions perhaps aimed at improving its retail offering. Numbers-wise, yes revenue and PAT have grown but an EPS of 0.47 for FY2006 would be among the lowest on the NSE. If you want to go long-term, the elephant in the room will Kenya Telecom, if you are a speculator, you need to ask yourself who will come into the secondary market given Institutionals are being catered for.

I keep wondering, our neighbour Ethiopia has a population of 80m, and yes they are mainly involved in agriculture, but why aren't more Kenyan companies (apart from Kenol) moving in?

I guess next time the WB president meets some Kenyan politician, they will have some common conversation topics along the lines of "I know I am supposed to non-corruptable, but I am human, right?"...

ACCESS KENYA IPO

check this link http://www.stockskenya.com/stkForumTopic.aspx?stk=0&top=1182.