More Profit Warnings at the NSE
18 companies expect earnings to drop by at least 25%
More Profit warnings at the Nairobi Securities Exchange
More companies issued profit warnings at the NSE with insurance provider Sanlam Kenya being the latest. A profit warning is usually issued if there is an expectation for profits to drop by more than 25%, as per NSE rules.
Sanlam expects its earnings for the period ended 31 December 2020 to reflect a decline citing the COVID-19 impact and negative currency movements which had an impact on the valuation of their assets. So far 18 firms have issued profit warnings and here is the list:
Mergers and Acquisitions
The consortium of Carbacid Investments, a Kenyan manufacturing and investment company, and Aksaya Investments, a Kenyan investment firm, have opened a 30-day period to acquire shares in listed gas Kenyan manufacturer BOC Kenya for Ksh 1.2 billion. This comes after the BOC Kenya Board resolved not to recommend the takeover offer given that Dyer and Blair Investment Bank, the independent adviser in the transaction, argued that the offer price of Ksh 63.5 per ordinary share does not reflect a fair value of the gas manufacturer and that it undervalues BOC Kenya by 30.8%.
Dyer and Blair Investment Bank wrote to the BOC Kenya board stating that the company has a fair value of Ksh 91.76 or an aggregate of Ksh 1.7 billion. The buyout deal also initially suffered a delay after Takeover Offer documents failed to be circulated as earlier planned.
Digital Lending Bill
Kenyan lawmakers have cleared the Central Bank of Kenya (Amendment) Bill 2020 that seeks to regulate the runaway mobile loan rates and treatment of defaulted credit to protect borrowers from predatory lending.
Currently, there is no state regulation for lenders, and the proposed law if passed will bring digital and mobile lenders under the watchful eye of the Central Bank of Kenya, the country’s monetary authority. The Central Bank of Kenya currently regulates banks and micro-lenders but the proposed law will grant it supervisory and licensing powers to oversee digital lenders operating in the country.
Central Bank governor, Dr. Patrick Njoroge has been keen on tightening the digital loans spree.
“We need at least some minimum requirements for these digital lenders to start running in the country as they are really tricking gullible Kenyans who have little or no knowledge on how they work”
NSE Derivatives Data goes LIVE
The Nairobi Securities Exchange has announced the introduction of real-time Derivatives market data on the Elektron Real-Time platform offered by Refinitiv . Elektron Real Time will provide investors Level I real-time updates on the NSE’s single stock futures and index futures products.
NEXT is NSE’s derivatives market that facilitates the trading of futures contracts. NEXT enables investors to trade single stock futures[Equity Bank, KCB Bank, Absa Bank, Safaricom, East African Breweries, BAT Kenya] and Equity Index Futures[NSE 25 Index]
“We are proud to collaborate with Refinitiv to meet the market’s demand for real time data of the NSE’s Derivatives Market. Partnering with a global data provider will not only attract foreign investors but also improve liquidity in the nascent market by enabling investors to make faster and informed decisions”
Geoffrey Odundo-NSE CEO
Kenyan Treasury floats Ksh 50 billion bond
The Treasury has reopened 10-year(FXD1/2019/10) and 20-year(FXD2/2018/20) fixed coupon bonds for budgetary support with a value date of 15 March 2021. The amount on offer is Ksh 50 billion.
What it Takes to be in the 1% wealth club
A wealth report by Knight Frank has indicated you only need a net worth (assets-liabilities) of $180,000, $70,000 and $20,000 to be in the top 1% wealth club in South Africa, Nigeria, and Kenya respectively.
Other Noteworthy Items:
Kenyan listed insurance firm Britam announces a new organizational structure that will result in a more competitive, efficient, and customer-centric organization. The new structure will gear the organization for enhanced digital innovation in its solutions and product development. The business realignment process will result in the elimination of some roles. Employees in the affected roles and positions are expected to exit the business under a Voluntary Early Retirement (VER) program.
The Treasury bills auction of March 4 2021 received bids totaling Ksh 33 billion against an advertised amount of Ksh 24 billion, representing a performance rate of 140.98 percent. The average interest rate on the 91-days, 182-days, and 364-day papers increased marginally by 9.3, 4.3, and 5.7 basis points respectively.
South African-based Liberty Holdings and the largest shareholder in Liberty Kenya plans to increase its ownership in Liberty Kenya from 57% to 73%. Liberty Holdings Ltd has announced its intention to purchase 84,235,930 additional shares in Liberty Kenya Holdings.
Kenyan bank Stanbic Holdings PLC announced its audited results of the group for the year ended 31 December 2020. Net earnings dropped 18.6% year on year to Ksh 5.2 billion. The directors have recommended a final dividend of Ksh 3.80 for each ordinary share of Ksh 5 on the issued and paid-up capital of the company. Subject to shareholders’ approval, the dividend will be payable to members on the book closure date of 21 May 2021.