NSE weekly catch up- bear is over

NSE was up 14pts on week at close of play in April and is now up some 25% since its low January signalling bear is behind us.

Results:
This week it was the turn of the insurers. Anybody reported 2008 after Thursday will be doing so in overtime (4mnths after year end), but would in any case not incur any fines.
Kenya Re was up 85% primarily due to some overdue revaluation of its property portfolio. The revaluation is ofcourse a one-off event performed either every year or in most cases every 3 years. The performance has helped caution it from the falls in its equities portfolio. Aside from that, KenRe did grow its underwriting while keeping claims flat over 2007. DPS is 50c some 15c higher than last year. All in all, good job Mrs Mbogo. Looks well shaped for the future. Please stop restating every prior yr's numbers.
Jubilee also rolled in with a weirdly presented set of annual results. PAT is up 10% on prior year driven by higher premiums. Solid insurance company compared to Pan Africa. Strong cash flow.
Express announced PAT down some 32% on last year driven by lower sales I suspect on the back of the slowdown in the economy. The company has been showing some seriously good momentum since its takeover by the Greeks. Cashflow looks a concern as it more than doubled. Negatively. Funnily enough, no dividend was proposed.
Crown Berger reported some Ksh28m PAT for the 2008, down almost 2/3rds clearing feeling the effects of oil costs, the fuel debacle and of course of worsening economy. DPS is Ksh1.
Sasini announced excellent interim numbers with turnover up 57% allowing it to record a profit of Ksh78m compare to a loss last yr. No detail was given on its beverage shops although they seem to be doing well.
KCB became the first bank to report the highly anticipated Q1 earnings and immediately blew my predication out of the water by only managing 5% PAT growth from the dreadful Q1'08.
Announcements: CMA confirmed that 3 brokers are short of cash and therefore won't get their licences for another 3 months. This sort of asymmetrical information remains a big no-no for investors and CMA need to be bright enough to figure out that if it announces 3 unnamed brokers are short of cash, investors will be wary as the 3 brokers will fix the situation by dipping into investors' cash. Eddie Njoroge is new NSE chairman. Nice enough chap, though perhaps not the step change that NSE investors are looking to see.
Macro: Despite my disappointment about the eventual outcome of the HBC issue, looks like many have taken it positively. Medium/long-term we are still in a swamp. Govt finances are in bad shape and now affecting banks' liquidity. All about the economy.
FTSE: In good shape. Pity US bank stress tests won't be announced on Monday as they are keeping some twitchy investors out of the markets. Need to get a move on and the sooner Tim G realises the better markets will perceive him.

NSE Catch up: Pre CO-OP Listing

If you bought:
Centum on Monday-you'd have made 15%
Sasini (12%)
But
Rea Vipingo would have lost you 12%

Does this mean NSE recovery is underway? Well, maybe-ish (I know, i couldn't get more ambiguous than this). I have noticed a recent trend in IPOs that just before they are listed to trade, the NSE always goes up. Some of this upward trend might be circular trading which is meant to generate cash to allow investors to buy into the newly listed share. Fundamentals are also looking a bit more stable but only if we assume that recent gova moves of reducing banks cash reserve ratio and to contain inflation by lowering the cost of feeding on ugali and also lowering electricity costs will work meaning that investors can be a little bit more positive about 2009 earnings. Volumes remain patchy illustrating the fragile confidence of majority of investors.

Sasini posted very "good" numbers. Until you took a closer look and notice the biological assets pick-me-up. One of the reasons that many financials were/are against IAS39 is because by forcing them to mark to market various assets, your P&L goes up and down like yo-yo especially in the transition year from boom to bust as 2008 has done for Sasini. IAS41 which governs agriculture companies has a similar effect. The best solution would be to do the mark to market but put the appreciation in their revaluation account which has the same impact on capital anyway. Something in your financials has to reflect what you did for a given period and an asset revaluation doesn't.

Isn't it time KenGen stopped its annual whining about its ksh75m AGM costs and just emailed investors the annual reports?

Still don't understand why the Mpesa audit and court is happening now?

Co-op: Lands on Monday. Recalling Everready pre-Xmas IPO two years ago, I don't expect violent movements either way though sellers may try to force the issue. The interesting play will be when class B shareholders can immobilise their shares and start profit-taking in earnest...

Joint venture opportunity: I am looking for somebody with knowledge or working experience of doing credit ratings or credit scoring to work with on a joint venture. And you are currently based in East Africa.

NSE Update

KenGen continues to disappoint. 2 years after its listing ushered a new era at the NSE, the company looks like its at a standstill. Note that even if you take off the depreciation hit it took for interim 2007/8, you'd end up with flat y-o-y growth. And I don't it has much by way of pipeline projects that will increase power output.

Merali companies, of which there are 3 at the NSE are notoriuos for under-delivering. As Everready heads to Ksh1, Sameer also has issues. Its blaming likely lower profit on events in Jan-Feb. Does that mean 1 quarter makes up its whole year? Sassini also saw lower interim profits despite only a small fall in turnover. I guess there goes Merali's plan to list one company per year...

When the CFC-Stanbic merger was announced yester-yr, there were some including me who were very excited. Over the last yr however, I've been re-examining the group and can see it has issues. The CFC Life business is seriuos drag on the it and the bank is not excitely firing on all cylinders. For Q1, group saw a 10% fall in PAT, due I suspect the fact that CFC Life continues to get hit by over-reliance on the NSE. The bank with a 10% rise, also underpeformed relative to peers.

Is it to take another look at StanChart? Notice FY saw 32% rise in PAT, comfortably above peer BBK and almost on a similar level to KCB. Then Q1 saw another jaunty 25% rise primarily driven by FX fee growth. But is it sustainable? I reckon I might just get some shares so I can find out at close quarters... After all, most other banks have seen furiuos balance sheet growth over the last yr and if the economy comes off the track, NPLs won't be far behind.
DTB is ofcourse a favourite bank share, 28% growth in Q1 is respectable.

Sasini's AGM

I find this story curious. The company only had its AGM yesterday to approve a share spilt-which already took place on the 14th of this month! I know the NSE has been desperate for business, but why can't they do things procedurally?
Other than that, I am encouraged that the tea and coffee companies are looking beyond growing and exporting tea and now thinking of doing value-adding. It has always seemed incredible that you get paid something like ksh9 per kilo of tea/coffee as a farmer, but a consumer in the West pays the equivalent of ksh300 for a cup of the same! Worse, the companies selling this cup of tea or coffee actually prefer to buy the raw beans or leaves straight from the farmer to keep the prices low; brand them so they can charge the premium and even go as far as taking legal action to stop the grower countries from branding their own product.

Who owns what at the NSE

http://www.eastandard.net/archives/sunday/hm_news/news.php?articleid=18216. Although the article is talking about foreign ownership of NSE listed companies, I thought it useful for our records as it has a little bit of information on Sasini, Limuru Tea, Kapchorua Tea and Williamson Tea.