Category Archives: NSE portfolio

CMA Kenya launches University Financial Literacy Competition

The Capital Markets Authority of Kenya formally launched the 2018 Universities Challenge at KICC in Nairobi on September 25, which aims to equip young people with investment skills and nurture a culture of financial literacy and investing and saving for the future through participation in capital markets.

The 2018 edition of the Universities Challenge, which runs from September 25 to December 31, will feature 6,015 participating students from 37 local universities. They will go through five stages of elimination through testing their financial literacy and knowledge, starting with an online exam, followed by a stage dubbed a “scavenger hunt”, then they will make presentations at universities followed by presentations to CMA staff. There will then be a grand finale event in Nairobi where twelve top students will get to pitch to investment stakeholders, CMA staff and representatives of all universities in the challenge.

Speaking at the launch, CMA CEO Paul Muthaura, said that the average age of entrants was 23 years and that this was as a result of them targeting ongoing students and make them young investors because of the long-term nature of capital markets investments. Also that the use of technology was part of the CMA’s engagement process of expanding financial literacy as well as to transform the visibility of the authority through social media. He added that the CMA was in the middle of implementing a ten-year master plan and had won several awards for being among the most innovative market regulators in Africa.

The winner of the 2018 inter-university competition will get a grand prize of a Kshs 150,000 (~$1,500) portfolio of listed securities of their choice and the university where the student comes from will get investment textbooks worth Kshs 75,000 for its library. Three other winners will get fully paid 3-day educational trips to observe a securities exchange and capital markets regulator in Africa.

Participate in the CMA University Challenge 2018

What can shares worth Kshs. 150,000 do for your life? How about a trip to a foreign country?  How about rewarding your university with books worth Kshs.75, 000? And what about being a guru in investing in the capital markets?

This is what is at stake for the winner of the Capital Markets Authority’s University Challenge 2018. The Challenge is open for undergraduate university students in universities that have confirmed participation. Register for this Challenge from 8th August 2018 to 22nd August 2018. Check the CMA website and social media pages for further details on the University Challenge registration process.

NSE Shares Portfolio February 2018

Comparing performance to six months ago a year ago, this portfolio is down 4% mainly due to shares sales, while the while the NSE 20 share index is down 7% from August 2017.

The Stable

Atlas —
Centum ↑
CIC Insurance ↓
Diamond Trust ↑
KCB ↑
Fahari  REIT↓
Kenya Airways ↑*
NIC ↑
NSE ↓
Stanbic (Uganda) ↑
TPSEA ↑
Unga ↓

In: None
Out: Bralirwa, at a 55% gain since buying in the Bralirwa IPO in 2011.edit TPSEA (Serena)
Increase: None
Decrease: None
Best performer: Kenya Airways*  (shares were diluted four times, price is up 235% from six months ago), Serena (up 36%), Diamond Trust 8%
Worst performer(s): Unga down 12%, CIC down 10% from six months ago)
Unexpected Events: (1) The offer by Seaboard to buy and de-list Unga (2) Kenya Airways restructuring impact on retail shareholders(3) Kenya bank shares resilience in their share prices even with concerns about their earnings growth in the era of interest rate caps.

Looking Forward to: (1) Banks expect interest rate caps to be re-assessed in 2018 (results in February 2018 (2) More infrastructure bonds from the government like M-Akiba (3) CIC developing a mixed-use project (Residential, commercial, educational, and recreational units) on 200 acres near Tatu City, Kiambu.

 

State of Kenya’s NSSF

Kenya’s National Social Security Fund (NSSF) published their financial accounts in the newspapers last week after they were earlier gazetted.

The Kshs 174 billion statutory fund, had income in the year to June 2016 of  Kshs 10.7 billion which was down from 19.3 billion the year before. The was after the fund received 12.8 billion of contributions from members (up from 11.7 billion) and paid out 3.1 billion. They had investment income of Kshs 12.8 billion, and paid administrative expenses of Kshs 5.5 billion leaving a surplus for the year of  Kshs 5.2 billion, and which was down from 13.2 billion in 2015.

In terms of assets, they have quoted shares of Kshs 49 billion (down from 57 billion in 2015), treasury/infrastructure bonds of 52 billion, 8.9 billion of corporate bonds, undeveloped land of 9 billion and buildings/ land of Kshs 19.9 billion.

Top shares in the NSSF Kshs 49 billion quoted investments portfolio include 25 million EABL shares (worth 6.9 billion shillings), 320 million Safaricom shares worth 5.6B, 116 million Britam worth 5.6B, 185 million KCB shares worth 6.2 billion, 88 million Equity Bank worth 3.4 billion, 3.2 million BAT worth 2.6 billion and 56 million Bamburi Cement shares worth 9.6 billion. NSSF also owns 24 million EAPCC shares worth Kshs 868 million and 148 million National Bank (NBK) shares worth 1.4 billion.

In the 1990’s the fund was sold illiquid plots at inflated prices and in the 2000’s, it deposited some funds in shaky banks that collapsed soon after. They still have a few issues with land, and the undeveloped land assets of the NSSF include 3.2 billion worth of plots at Mavoko and a Kshs 3.5 billion plot on Kenyatta Avenue in Nairobi.

The NSSF accounts were audited, by the Office of the Auditor General of Kenya (OAG) who qualified the accounts of the fund owing to some issue including

  • Unremitted contributions; A sample of 20 employers found that they had not remitted Kshs 755 million of deductions to the NSSF.
  • Another 764 million of contributions were held in suspense accounts.
  • Hazina Plaza/Polana Hotel Mombasa had rent owed to the NSSF of 239 million.
  • Milimani Plots at Kisumu where a Kshs 178 million estate that brings no income.

Other issues flagged included:

  • The stalled Hazina Trade Centre in Nairobi, which remains 38% complete with construction having been halted after Nakumatt Supermarkets who have a branch in the building had refused to give the contractor (China Jiangxi) access to the basement where they were to provide reinforcement to pillars of the building. The OAG recommended that the NSSF take legal action against Nakumatt in order to complete the Kshs 6.7 billion construction.
  • NSSF new rates

    NSSF budgeted income for the year was  Kshs 44 billion, but only 10.8 billion was raised; This was partly due to poor performance of the portfolio of shares listed at the NSE, but also due to non-implementation of changes to the NSSF act which would have seen increased contributions from members into the scheme.

  • Illegal transfer of a plot of land from the NSSF to Kenya’s Judiciary, and works at Nyayo estate at Embakasi.

$1 = ~Kshs 100

NSE Shares Portfolio August 2017

Compared to six months ago

Comparing performance since February, this portfolio is down 3% mainly due to shares sales, while the while the NSE 20 share index is up 41% from February 2017.

The Stable

 

 

 

 

Atlas —

Bralirwa (Rwanda) ↓

Centum ↑

CIC Insurance ↑

Diamond Trust ↑

KCB ↑

Kenya Airways ↓

NIC ↑

NSE ↑

Stanbic (Uganda) ↑

Unga ↑

Summary:

  • In: None
  • Out: TPS EA (Serena), Fahari I-Reit (Stanlib)
  • Increase: None
  • Decrease: None
  • Best performer: CIC Insurance (up 95% since February) , NSE 84%, Diamond Trust up 77%.
  • Worst performer(s): Bralirwa down -3%, KQ -1%
  • There’s been a surprising resurgence in shares that’s been very quiet, amid the expected decline and investor exists with the August 8 election.
  • Kenya Airways restructuring deal has not yet hit the share price but will dilute shareholders by 95%
  • The surprising Safaricom sale with Vodacom buying out Vodafone
  • Banks are struggling, despite their rising share prices.
  • Disappointment with East Africa: The Vodacom Tanzania IPO stalled until it was opened to foreigners, and it crossed the finish line at with a full subscription after PIC of South Africa made a huge investment to bridge the gap. The Vodacom IPO was not marketed to Kenyans or through local stockbrokers. That said, it has been a struggle holding shares in different East African countries after the welcoming IPO period has passed, with difficulties collecting dividends or selling shares to get money back.

Other portfolio updates from three years and five years ago.