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#1 ·
Kenya's Safaricom-nomics What Impact Awaits NSE

Could a successful IPO increase Market Cap to 1.2Tr Shillings by next years 1st Quarter?

The NSE vice-chari said the shares should be sold at a premium so that the government can get as much revenue as possible from the sale. It is thought that the IPO could raised as much as Sh75 billion( 1.2b$) if 15 billion shares are sold or Sh60 billion if there are fewer shares.

Mr Wangunyu Nairobi Stock Exchange vice chair said at least 80 per cent of the shares should be reserved for the locals and a provision set that should the local demand increase, that this ceiling would be raised.


Mr Wangunyu said that at least 80 per cent of the shares on offer should go to local investors and be increased in the event that demand is higher, meaning foreign investors would not be assured of any stake.
If such were to happen, it would deny the global coordinator and book runner – Morgan Stanley International Plc – a chance to earn handsome commissions. For the global firm, the commissions are key to the transaction because it - with Dyer & Blair - bid five cents to do the transaction advisory services job.

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#32 ·
Kenya Shilling tumbles to new lows against the Dollar

Kenya shilling slides to new record low vs dollar

March 11, 2011 2:09 PM EST
The Kenyan shilling hit fresh record lows against the dollar on Friday, slipping past 85.00 to the dollar in its biggest one-day drop since May last year on interbank trading, traders said.

Central bank governor Njuguna Ndung'u said the shilling's slide was an overreaction driven by speculation that there were not enough exchange reserves to meet the country's needs, but traders said there was fundamental demand from importers. The shilling fell 1.78 percent on Friday, its biggest one-day drop against the dollar since May 19, 2010.



At 1300 GMT, when the market closed, commercial banks quoted the shilling at 85.70/80 to the dollar, sharply weaker than Thursday's close of 84.30/40."Friday's market activity has been dominated by heavy interbank dollar buying," said Mwambu Malamba, a senior trader at Commercial Bank of Africa.

Traders said they expected the central bank to take action next week because the market had been somewhat distorted by the interbank trade. "If the shilling weakens in a disorderly manner in CBKs (Central Bank of Kenya) view, then we expect them to act responsibly," said Malamba.

The bank maintains a policy of non-interference in the currency market unless there is substantial evidence of speculative trading on the shilling by market players. Some traders said the shilling recovered some ground in after-hours trading as banks sold on their interbank longs.

"Some longs are being flushed out slowly. After hours Friday will be a messy session. Banks can trade until the last man standing," said Chris Muiga, a senior trader at Kenya Commercial Bank. Traders said they expected the shilling to recover some ground to 84.00 against the greenback in coming days. Technical analysis shows the shilling weakening could pause at 86.00 unless the dollar gains versus regional currencies in which case the Kenyan currency could plunge as low as 90.00.

Charts put it on a long-term downtrend.
In stocks, the benchmark NSE 20 Share Index was up 13.25 points to 3,928.25 on renewed foreign investor interest following a drop in most stocks prices, analysts said. Analysts had said stocks would draw in bargain hunters, including some foreign players, at about the 4,000 point mark, spurring a gradual recovery.

"There is a lot of foreign buying because the stocks have fallen to attractive levels," said Cynthia Omondi, an analyst at Africa Alliance Securities. "They have just realized it is time to take advantage of the low prices, the factors that made them pull out still being there." Bamburi dropped a further 2.7 percent to 180.00 shillings per share even after one of its biggest shareholders, National Social Security Fund (NSSF), clarified it was not seeking to divest its stake in the cement manufacturer.

"The impact of (the) statement of the managing trustees at NSSF did not satisfy investors concerns over Bamburi's competitor performing better than them. Investors still have doubts," said Omondi. In the bond market, corporate and government bonds worth 1.014 billion shillings were traded during the session, slightly down from 1.294 billion on Thursday.
Read more: http://www.ibtimes.com/articles/121...to-new-record-low-vs-dollar.htm#ixzz1GKeo2xuh

Good news for the diaspora at least in the short term. But my feeling is that it may slide further before it recovers some ground.
 
#36 ·
^^ that's the point I'm trying to make, but what percentage of the goods consumed in Kenya are actually produced in the country? We probably might not know, but if the percentage was large then the threats of a weaker shilling wouldn't be a problem as Kenya wouldn't be relying on imported goods whose prices can change dramatically with currency changes. I haven't heard exporters complaining though.
 
#37 ·
èđđeůx;74223140 said:
^^ that's the point I'm trying to make, but what percentage of the goods consumed in Kenya are actually produced in the country? We probably might not know, but if the percentage was large then the threats of a weaker shilling wouldn't be a problem as Kenya wouldn't be relying on imported goods whose prices can change dramatically with currency changes. I haven't heard exporters complaining though.
Kenya's economy is very much import driven, If you look at the volume of imports to exports in the last few years I believe it's more than 2:1. and that's not a good thing for a country that aspires to grow its industries coz of increasing deficit. Although it may be good overally in increasing the size of trading volumes that a country does.

The weak Shilling though is good for exporters as their exchange margins will be much higher and tough for importers who have to spend alot more.
 
#39 ·
HSBC Comes To Kenya

International banking group HSBC has set up shop in Nairobi, stepping up financial services firms’ race to secure a foothold in East Africa’s budding economies.

The London based banking group said it had acquired a license from the Central Bank of Kenya to open a regional office. “I can confirm we have a rep office in Kenya,” said the bank in a statement on Tuesday.

Visa International, a payment systems services company, announced last week that it will start operations in Nairobi, while US bank JP Morgan Chase said it was also eyeing an office in the Kenyan capital.

Jaap Van Luijk, who has been appointed representative for HSBC Kenya and the east African region, declined to comment on the issue.

He said full details of the operation will be announced in about two weeks.

Increasing trade ties between east African countries and the developed and emerging economies are seen as the main attraction to the region for the international banks.

“There’s a lot of focus on Africa because our senior management sees a significant growth opportunity over the next 10 years and we’re seeing our clients increasingly move here, be it an Indian multinational or a German multinational,” Mr John Coulter, the JP Morgan CEO for Sub-Saharan Africa, told Reuters African Investment Summit on March 7.

Headquartered in London, HSBC is an international banking and financial services organisation with a network that comprises about 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

It is listed on the London, Hong Kong, New York, Paris, and Bermuda stock exchanges.

Analysts said HSBC will be looking to offer transactional banking services such as foreign exchange and trade finance to its clients.

HSBC’s entry will enhance Nairobi’s claim to a regional financial hub status, backing recent intentions by Treasury to establish an exclusive financial district in the capital.

The bank’s entry will also open a window for more foreign investors.

“It will be good for other market players,” said Suntra Investment Bank chief executive Michael Gichohi, adding that the move is not surprising since Kenya is becoming attractive to foreign investors wanting to venture into the continent.

Other international investment banks that have set up shop include Russian investment bank Renaissance Capital, and Pan African investment group African Alliance.

Renaissance Capital bought the license of defunct stockbroker Francis Thuo and Partners in 2007.

http://www.businessdailyafrica.com/...al+hub/-/539552/1125546/-/to6581/-/index.html
 
#42 ·
I don't think so. Banks tend to have their "niche" markets. HSBC will focus on multinational companies based in the region. Our local banks focus on the ordinary Kenyan/East African individuals and businesses. Other large banks like Citibank have been in operation in Kenya for years now but they haven't screwed up our local banks.
 
#44 ·
i know other projects other than HSBC and KFC, the likes of LG and HP have both opening training academies in Nairobi,:) and Finally another Foreign university is heading home, the London School of Commerce have started their campus at I&M building and the first intake will be June :cheers:
 
#48 ·
HSBC sets sights on loans for major projects in region

International banking group HSBC is eyeing big regional infrastructure financing deals in a strategy that seeks to replicate its South African business model, head of global banking for Africa Ian Carr said on Monday.

The big infrastructure projects currently underway in east Africa represent long-term lending opportunities for international financiers.

HSBC has opened a representative office in Nairobi which Mr Carr said will serve as a sales and marketing office in the region.

It will also be offering trade confirmations, export and infrastructure financing services.

In 2009, HSBC signed a deal with the City of Johannesburg for purchase of a fleet of 143 buses from Brazil’s BNDES Export Credit Agency for the city’s rapid bus transit system.

It is estimated that upgrading the whole system will cost 10 billion rands (Sh122 billion), with the money being channeled to infrastructure, fleet acquisition and management systems.

With the east African government’s limited resources, private public partnerships offer viable financing solutions, Mr Carr said.

“There is significant infrastructure funding requirements in Kenya,” said Mr Carr.

It is estimated that the eight-lane Thika super highway currently under construction will cost Sh26 billion, which exceeds the Sh20 billion roads maintenance fund set aside in last year’s budget.

In contrast, the African Development Bank (AfDB) has allocated has allocated $700 million (Sh59.52 billion) in 20 on-going infrastructure projects.

Read More
 
#58 ·
NSE to sell its shares to public by April

The proposed separation of ownership and management of the Nairobi Stock Exchange — demutualisation — is part of broader ongoing reforms aimed at deepening the capital markets in the country.

The industry regulator, Capital Markets Authority, published rules last month that will guide the process, which will see the NSE selling its shares to the public by April this year.

“The legal, institutional, and regulatory reforms are expected to broaden markets by increasing competitiveness, encourage development of new financial products, enhancing governance structures and bolstering investor confidence,” said CMA chief executive, Mrs Stella Kilonzo.

She added the reforms are in line with Kenya’s aspirations under the Vision 2030, where the capital markets are expected to play a pivotal role in mobilising long-term resources to support productive economic activities.

She was speaking during a discussion on demutualisation at the International Organisation of Securities Commissions Africa Middle East Regional Committee Conference in Mauritius.

The stock exchanges in Mauritius — the first stock exchange to demutualise, South Africa and Dubai, have already demutualised, while Nigeria recently announced plans to embark on the process.

Speakers pointed out some of the positive impacts of demutualisation on their markets such as increased trading volumes as a result of embracing technolog.

Daily Nation
 
#59 ·
First NSE cross-listing to open window for investors

The Nairobi Stock Exchange (NSE) is set to see the first ever cross-listing of a company from a neighbouring country, opening a new investment opportunity for investors keen on diversifying their portfolio beyond Kenya’s economy.

The intended cross-listing of “at least two companies” from neighbouring countries is still at the discussion stage, but the NSE said at least one of the firms is expected to start trading before the end of this year.

Mr Donald Ouma, the head of product development and research at the NSE, said the new stock is expected to be listed by way of an initial public offering (IPO).

He, however, declined to reveal the identity of the firms citing client confidentiality, but said more details will be made public before the end of next month.

“We have held discussions about a yet-to-be listed stock from the region, the company to be cross-listed would be by way of an initial public offer,” said Mr Ouma.

Rwanda’s biggest State-owned lender Bank de Kigali’s is expected to be sold to the public later this year in an IPO, making it a prime candidate for the intended cross-listing.

At least seven Kenyan companies are cross-listed in Uganda, Tanzania and Rwanda stock exchanges, but no company from the region has listed its shares at the Nairobi bourse.

The cross-listed companies include Kenya Airways, KCB, Nation Media Group, Centum, Diamond Trust Bank, Jubilee Holdings and Equity Bank.

Regional markets

Safaricom, Stanbic Bank Uganda and Rwandese beer maker Bralirwa have floated cross-border IPOs, giving local investors a chance to diversify their investments even though they their exposure to neighbouring countries remains small mainly because the other regional capital markets are still at their infancy.

In Rwanda for instance, the Kigali Stock Exchange was launched in January this year.

It has only three listed companies, Bralirwa — the country’s biggest beer and soft drinks maker, Nation Media Group and KCB.

The expected cross-listing will take the tally of listed firms at the NSE to 56 with at least five other local firms, among them British-American Investments Company and TransCentury expected to list at the bourse before the end of the year.

In an interview last week, chairman of Dyer and Blair Investment Bank, Mr Jimnah Mbaru, predicted that the company most likely to be cross-listed at the local bourse would be Bank de Kigali, which is expected to sell 25 per cent of its shares to the public to raise additional capital to fund growth.

“The only offering I expect to go public and cross-list at the NSE would be the Bank de Kigali,” said Mr Mbaru, whose firm was a joint transaction adviser in the listing of Bralirwa.

He is betting on the capital requirements by both governments and corporations across the entire region to encourage fundraising activities beyond their jurisdictions- a key factor informing the ongoing push for the integrating of the regional capital markets.

Mr Ouma added that the NSE was working with the other stock exchanges to introduce a trading platform that would integrate their operations aimed at minimising price differentials in the specific markets for cross-listed shares.

BusinessDailyAfrica
 
#60 ·
Kenya shilling falls to almost 90 against dollar
The Kenya shilling Monday fell further to trade at Sh89.50 against the US dollar.

This came even as the market was alive to the fact that the local currency could plunge to as low as Sh90 against the green buck soon.

Market records indicate that the last such levels were witnessed in March 1994.

The all time lows, dealers in the market have noted, is a worrying trend, having been sustained in the last one month.

“We have seen the demand rising over the last one month and not the same can be said of supply.

“This is very worrying for the market,” a dealer at a local bank, who did not wish to be named, said.
continue reading...
If only Kenya's economy was geared towards exporting huh? Inflation is expected to increase.
 
#61 ·
New CMA chairman steps in with focus on market reforms
The newly-appointed chairman of the Capital Markets Authority (CMA), Mr Kung’u Gatabaki, plans to steer market reforms as he steps into his new role in the regulatory body.

Mr Gatabaki said his priority would be to add urgency to the process of re-structuring stockbrokers’ ownership and management of the Nairobi Stock Exchange (NSE), which is behind schedule.

“I realise the important role of the capital markets in accelerating capital-raising to finance investment. I will work closely with fellow CMA board members to ensure we steer the authority to deliver on this important development agenda,” said Mr Gatabaki.
continue..
Shilling firms against the US greenback
The Shilling firmed against the dollar Wednesday helped by off-shore selling of the greenback and traders said the Kenyan currency was still under pressure from the energy and food sectors.

Commercial banks quoted the Shilling at 89.20/30 against the dollar -- after touching a high of 89.00/10 earlier-- stronger than its Tuesday close of 89.35/45.

“The Shilling has been boosted by off-shores selling dollars in early trade. We are likely to see some corporate demand push it lower though,” said Mr Dickson Magecha, a senior trader at Standard Chartered Bank.

Traders said they expected the Shilling to trade in the 88.50-89.50 range against the dollar in the days ahead, after it hit an all-time low of 89.80/90 on Monday.
continue..
CMA flags off Shelter Afrique’s fourth bond issue
Mortgage financier Shelter Afrique has received the Capital Markets Authority’s approval to sell the first tranche of its Sh3 billion bond, setting the stage for this year’s first corporate issue.

The housing financier will start by issuing a Sh2.5 billion note.

Founded in 1982, Shelter Afrique is owned by governments of 42 African countries, the African Development Bank and the African Re-Insurance Corporation. Kenya owns 13 per cent of the firm.
continue..
How you could own a piece of prime real estate
Mention the term real estate investor and what comes to mind is a well-heeled individual who can put millions of shillings into a building project with relative ease.

Because of its capital-intensive nature, real estate investment is for the rich.

The less materially-endowed Kenyan majority, just as happens in many other economies, have to join forces and pool resources if they want to invest in the property market.

Happily, that is about to change, thanks to a new investment window that seeks to allow real estate to be traded on the Nairobi Stock Exchange.

The Capital Markets Authority has drafted rules for a special investment vehicle known as Real Estate Investment Trusts (REITs) that will allow individual investors to buy and sell shares of properties listed on the bourse in much the same way people trade in stocks and shares of companies listed on the stock exchange.

Large investors will be allowed to raise money from the public through the capital market, making it possible to channel capital into the real estate sector in a more structured manner.
continue..
 
#62 ·
Uncertainty in financial markets as Kenya shilling touches historic low
Money markets remained jittery on Thursday amid concerns about stability of the shilling, as it was pushed above Sh90 to the dollar.

At one point, the currency exchanged at Sh91.05, a level which market traders noted was a historic high.

The last time the local currency flirted with such lows was in March 1994 at the height of the Goldenberg scandal.

As the local currency slipped, there was evident anguish among importers who now fear losing billions of shillings to the weak shilling.

Analysts pointed to weakening in the coming days, notably in offshore interests, as well as the economic turmoil in the Euro zone, especially Greece, having an impact.

“We are not seeing any inflows and without action, it can weaken further,” Mr Steve Lagat, a dealer at CfC Stanbic Bank, told the Nation

The febrile mood in the markets was accentuated by silence from the Central Bank of Kenya, which appeared caught off-guard by the movement.
Source
 
#65 ·
Honestly, I dunno. It's so unpredictable, imo.-_-..The weak shilling definitly isn't improving my prospects for the NSE, but we'll see. we'll just have to wait and see how things turn out.:)

Defensive share plays on NSE to beat weak shilling
The Central Bank of Kenya moved to stem the tide by raising the Central Bank Rate by 25 basis points to 6.25 per cent. But the shilling has continued on a losing streak, touching lows of Ksh91 to the dollar last week.

If, as widely expected, the shilling continues on a downward slide against the dollar in coming weeks, which stocks will be safe?

Renaissance Capital analysts pick Athi River Mining, KCB, KPLC, Safaricom, EABL and Mumias.
TheEastAfrican
 
#64 ·
sharia loans might not be charging interest...but you do think you paying back the same amount...nope.you will be paying imputed interest which will be added on the loan.nairoberry..if you have some time read about the financial mess of dubai, you will have a better understanding of this sharia loans-how the global markets are dealing with these loans....good question nairoberry.
 
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