Category Archives: NSE OTC

Kutwa Tuesday: Capital Chickens

Capital rights issues come home to roost

Last October this post discussed banks’ needing to raise share capital to support their rapid growth over the last five years. Since that time, Diamond Trust, NIC, Housing Finance, Equity and now KCB have all gone ahead and put plans in place to increase their share capital to catch up with their asset base.

KCB hopes to raise Kshs. 5 billion and hopefully this could spur some quality mid-tier banks, with foreign shareholding to step forward to the NSE listing place as well i.e K-Rep, Commercial Bank of Africa, Investment & Mortgages, Fina, Citibank and even Cooperative banks.

corporate news

KQ expands (From African Flyer blog) – Kenya Airways will from mid-year increase flights on routes in Africa (Ethiopia, Nigeria, Ghana), Mid-East (Dubai) and Far East (china, Hong Kong, Thailand)

Another stockbroker falls: This time it’s another small firm – Nyaga stockbrokers. This is not unexpected, as problems were well known for over as year and had even been discussed in a stockskenya forum. The authorities (CMA) can’t pretend to act surprised as they had in the past considered taking action against the firm whose managers repeatedly sold investors shares without their knowledge – and when caught they would blame errors, and take their time correcting the situation, only to repeat the same up to last week.
– Though the NSE launched a 100 million rescue package, a Business Daily story mentions that as much as 820 million could be owed to clients.
Other blogger takes: The KCIG has some suggestions for the capital markets authority while Coldtusker is dismayed by the pattern of bailouts of Nyaga Stockbrokers and Invesco Insurance after financial shenanigans.

OTC Bank shares: Are shares Family Bank available to buy on the over the counter?

New branches: coming soon Gulf Africa bank at Hughes Building – Kenyatta Avenue, and a new Family Bank branch opp. Yaya Center, Kilimani

Big radio opportunity: Kenya’s highest-rated radio show, Kiss FM
Big Breakfast Show (with Carol Mutoko) is looking for a new voice to join her on the show. Send a CV with a recording to md@kissfm.co.ke

Happenings at the nairobi Stock Exchange

(1) East Africa Breweries effected a 5 for 1 share split yesterday to make it’s stock more affordable. It closed yesterday at 114 shillings/share down from 530 the previous day. It is the second company in the to do a stock split this year – Kenya Oil Corporation (KENOL) did the 1st ever with a 10 for 1 split earlier this year – and it’s share price has already climbed back to 60 which is the highest price 9equivqlent of 600 shillings – before the split).

(2) In a related matter the Financial Post (a new weekly paper in Nairobi) has an article, which says that 14 companies plan to be listed on the NSE once their over the counter (OTC) market is operational. Companies will only have to display two years of profits unlike the NSE where you have to show five years – or they also don’t have to show good profit industry, only the potential to turn round! Companies lined up include Kenya Cooperative Creameries and Cooperative Bank, Tim Sale, Hutchins Biemer and Orion – an agro chemical company.

This OTC market will target the cooperative movement. Just the fact that a company cannot meet listing requirement for the NSE, make these much riskier investment vehicles – especially for the cooperative sector which is riddled with mismanaged giant societies. I think small investors can participate in the NSE-proper as the KQ AGM showed. It’s stock trades for 19 shillings, and there are several other companies that trade for below 50 shillings.