Category Archives: capital gains

Finance Act to Enhance NSE Investments

The Capital Markets Authority highlighted some points about the recently passed Finance Act that enhance the investment climate in Kenya. These include;
  • Removal of capital gains tax (CGT) on the transfer of securities traded on any licensed securities exchange.
  • Allowing a company introducing shares through listing to pay 25% corporate tax for 5 years.
  • No stamp duty on the transfer of property to a Real Estate Investment Trust (REIT) till after year 2022.
  • Asset-Backed Securities (ABS) are exempted from paying stamp duty on securitization transactions.

Bank shares in ’06

Share performance of financial institutions listed at the Nairobi Stock Exchange in 2006.

Share prices as at: Dec 05 Dec 06 Change
Barclays Bank 263 77 (385) 46%
C.F.C Bank 75 89 19%
Diamond Trust 32.25 72.5 125%
Equity (listed in August ’06) 70 139 99%
Housing Finance 13.95 48 244%
I.C.D.C Investments 72.5 325 348%
Jubilee Insurance ]83 323 289%
Kenya Commercial 113 241 113%
National Bank 28.75 58 102%
NIC Bank 51 102 100%
Pan Africa Insurance 40 91.5 129%
Standard Chartered 139 205 47%

Other share activity
– Barclays had a 5-for-1 share split and a bonus issue of 1 for 3 and still paid the highest dividend of about 14 sh. per share in 2006
– Standard Chartered paid a 7.5 sh per share dividend
– Jubilee paid 4.25 sh dividend
– KCB paid a much improved dividend of 4 sh per share
– NIC paid a 2.5 sh dividend
– Equity joined the NSE as the entire shareholding was listed in August 2006 at 70 shillings per share after earlier paying a dividend of 2 sh per share.
– ICDCI shares rocketed up into the stratosphere as the company announced a 10 for 1 share split
– Pan Africa Insurance paid a 1.2 sh dividend
– CFC paid a dividend of 0.84sh per share
– Diamond Trust paid a 0.7sh dividend
– National Bank and Housing Finance had improved earnings but no dividend.

(Not Quite) A Bank Merger

Commercial bank of Africa, the No. 3 Bank in Kenya took over First American Bank, the No. 12 in a deal announced this week.

It’s not quite a merger, but more a realignment of business divisions since the two banks have a common shareholding among prominent wealthy families in Kenya and the deal will consolidate the shareholding of the two banks in one entity. Both the Jomo Kenyatta and the Naushad Merali families have a substantial interest in the two banks.

Merali owns a 14 per cent minority stake in CBA and bought out First American Bank of Kenya from First Bank of Chicago in 1987 in addition to also owning Equatorial Commercial Bank through his Sameer Group which is ranked No. 17.

(Rankings from the Market Intelligence 2003 Banking Survey)