Category Archives: NSE investments

Kenya’s Money in the Past: Nairobi Stock Exchange in 1997

What companies were listed on the Nairobi Stock Exchange, twenty years ago, in 1997? A chart of listed shares appeared in Financial Review which was a popular magazine that featured business, and later political stories.

Still Listed
BAT Kenya
Bamburi Portland Cement
Barclays Bank of Kenya
Car & General
Carbacid Investments
Credit Finance  (later CFC, now Stanbic?)
Diamond Trust
Dunlop Kenya (now Olympia)
Eaagads
East African Breweries
East African Cables
East African Portland Cement
E. A. Oxygen (now BOC)
Express Kenya

ICDC Investment (rebranded as Centum)
Jubilee Insurance
Kakuzi
Kapchorua Tea
George Williamson (Williamson Tea)
Kenya Oil (Kenol)
Kenya Power & Lighting
Limuru Tea
Nation Printers & Publishers (now Nation Media Group)
National Industrial Credit (now NIC Bank)
Pan Africa Insurance (now Sanlam Kenya)
Sasini Tea
Unga Group


De-Listed 
CMC Holdings
A. Baumann & Co
Brooke Bond (became Unilever Tea)
Hutchings Biemer
Elliotts Bakeries
Kenya Orchards
Marshalls
Ol Pejeta Ranching
Timsales
Uplands Bacon Company

Gone
African Tours & Hotels (now Kenya Safari Lodges)
Chancery Investments
Consolidated Holdings
City Brewery Investments
E. A Bag & Cordage
E. A . Packaging
E. A. Road Services
Kenya National Mills (absorbed into Unga)
KCC (there’s now New KCC)
Motor Mart & Exchange
Pearl Dry Cleaners
Philip Harrison & Crossfield
Sofar Investments
Theta Group

This Standard article explains what happened to some of the companies. e.g. City Brewery manufactured City Lager beer, and Theta was a tea factory while many others were bought out or went out of business,

Also, see Who Controls Industry in Kenya in 1968. 

Uchumi Rights Issue: CMA Acts – Part I

Yesterday the Capital Markets Authority (CMA) meted out punishment, following the Uchumi Supermarkets (USL) rights Issues.

Back in 2014. Uchumi’s rights issue to raise Kshs 895 million ($10 million) by offering shareholders 3 shares for every 8 held at Kshs 9 per share, with the funds to be used for expansion in East Africa and refurbishment of stores.

(Excerpts from) The CMA statement reads:

  • The regulatory breaches of the former directors and the two USL officers were identified in respect of the period of 2012 – 2015 and involved making changes to the Information Memorandum (IM) after CMA approval; failing to make proper disclosure of material information to inform investor decision making; misapplication of Rights Issue (RI) proceeds; mis-statement of financial statements in 2014; weaknesses in board oversight of the branch expansion programme; inadequate conflict of interest management; and inadequate disclosure of asset sale and leaseback arrangements. The breaches of the transaction advisor revolve around not ensuring changes made to an approved IM were submitted to CMA for further approval.

Also that

  • Out of the Ksh895 million right issue proceeds received by USL in January 2015 it was established that a small portion was used to pay the rights issue expenses but the balance was transferred to the trading account from where payments were being made to settle outstanding suppliers’ debts as opposed to funding branch expansion.

And

  • With respect to the financial statements for the period ended June 30, 2014, that were used to support the Right Issue, it was established that a Ksh350 million asset sale and lease back transaction was recognized, while the agreement for the same was signed and funds received in September 2014 . As a result of this recognition, USL’s profits as at June 30, 2014 were enhanced by Ksh19.97 million arising from the gain on sale of the assets. Further, the USL liabilities were understated to the tune of approximately Kshs.1 billion. The Board subsequently reversed this treatment in the audited accounts in 2015, stating that this recognition had been premature.

Other recent actions by the CMA have targeted directors of Imperial Bank and CMC Group.

Olympia 2016 AGM: Turnaround? Part II

Olympia Capital held it’s 2016 AGM in in Nairobi on Monday. It was a brief meeting at the 680 Hotel during which the board promised they had turned the company round and expected to pay a dividend next year and be on time with their financial reports.  They will announce their half year results, in two weeks, and the CEO said their (unaudited)  business in Botswana was their best investment,  while  South Africa was a disaster where they had lost a lot of money.

Pic from the CBK website.

We don’t want cents

He said, 17 years after they made the deal, 50% of the company business is now from outside Kenya, and even though the Botswana Pula had major exchange rate swings they expect  Kalahari Floor Tiles to pay an interim dividend which will be passed on to Olympia shareholders as a full year dividend.

Shareholders questioned the company’s debts, investment decisions & classification, the absence of the chairman’s report from the accounts and a decision to de-list a subsidiary in South Africa to protect it from creditors.  On the, promised dividend, shareholders said that they want shilling dividend payments, not cents.

PLC company names in Kenya

BAT Kenya is the latest company to change its name to PLC. Others have been KCB and CFCStanbic, earlier this year.

This comes from the Companies Act which was enacted  late in 2015 and which has a clause that read  a company that is both a limited company and a public company may only be registered with a name that ends with the words “public limited company” or the abbreviation “plc”.  The old limited (‘Ltd’) that most companies will now be reserved for company that are private companies.

So expect all NSE-listed companies to adopt the change from Ltd to Plc.

Kenya Airways 2016 Results

Kenya Airways announced their results this morning at their Pride Centre in Nairobi. The CEO – Mbuvi Ngunze , Finance director and management all  referred to the airline being stable after a turbulent stall.

  • They flew 4.2 million passengers (up from 4.1M the year before) and  –  with about 11,500 passengers daily and 158 tons of cargo per day, they had a 68% cabin factor, which is decent for African routes.
  • With fewer aircraft – 36 (compared to 43 before) they operated more frequencies to the same 54 destinations.
  • Turnover went up 5% to Kshs 116 billion and management says they broke even on operations in 2016 compared to an 11 billion loss last year.
  • They reported a gross profit of Kshs 48 billion and operating loss as at March 2016 of Kshs 4.1 billion that’s 75% less than the Kshs 16.3 billion of the year before.

KQ wing JKIA

  • Fleet ownership costs were Kshs 29 billion –  up from the year before as the full cost of the arrival of the 787’s were felt. They also had to make provision for the aircraft that they are leasing out to other airlines.  
  • Net finance cost was Kshs – 7 billion, up from Kshs  from 4.5 billion. They had to pay more interest on their borrowing some of which were short-term, and in 98% of which are in dollars (taken when the US dollar was Kshs 75, but which now exchanges at Kshs 101).
  • Foreign exchange losses were Kshs 10.8 billion up from 1 billion, and Mbuvi said that, if the Kenya shilling did not depreciate, the loss would have been Kshs 10 billion smaller. They also had to book losses from countries like South Sudan which devalued its pound from  3 to 31 to the dollar.
  • Fuel hedges resulted in a loss of Kshs 5 billion.
  • Overall loss before tax of 26 billion, and the valance sheet went down from Kshs 141 to 128 billion. For shareholders, the reserves are now Kshs -51 billion.

Q&A

Ethiopia: What is Ethiopian doing right that KQ isn’t? KQ had some advantages, ET has some advantages. They operate a different network – we focus on Africa, they focus outside, and the frequencies into Addis and the frequency into Nairobi are different.

US flights: While the government is excited about category one upgrade of JKIA, Mbuvi said that their priority is code sharing with a US partner, more than doing direct flights themselves.

Currency reparation: Globally, airlines have $4 billion in non-repatriated currencies (with $400 million in Nigeria) and KQ faces challenges in Sudan, Nigeria, and Angola

Other: The last good year for tourism in Kenya was 2011, when there were 1.8 million tourist arrivals (it was 1.3 million last year) and 2017 will be an election year for Kenya. They are yet to assess Brexit impact but commodity slowdown and currency crunch has seen a slow down in the African routes they operate in.

They said the Government of Kenya and KLM, remain supportive of the company’s turnaround efforts which are embodied in Operation Pride, and this comes in a year in which they were voted the leading airline in Africa and leading airline for business class.