Kenya Tea Farmers should brace themselves for lower earnings following a dip in the beverage production.
This follows the persistent dry weather experienced in the year’s (2017) first quarter compared to a similar period in 2016. Kenya Tea Development Agency (KTDA) report indicates a 25 percent decline in tea deliveries in nine months to March 2017 where production was at 90.09 kilograms compared to 139.60 kilograms recorded in a similar period last year.
With expectations that the key tea-growing areas will receive depressed long rainfall, low production is expected to continue throughout the year. Prices at the Mombasa Tea Auction remain low (average of KES. 250/kg) owing to surplus tea in the market carried over from 2016 despite the current low production.
Turnover took a downtown on Friday to 1.4 billion shillings as uncertainty on this month’s bond issue rose, as the announcement was expected before the end of the week but was not published.
The T-bill offerings performed well the past week with the CBK having reduced the offer amount on the 91-day T-Bill from 10.0 billion shillings to 4.0 billion shillings.
The 91-day received bids worth 11.8 billion shillings with the CBK accepting only 3.6 billion shillings at a rate of 8.75 percent. The 182-day T-bill received bids worth 25.3 billion shillings against an offer amount of 10.0 billion shillings with the CBK accepting 20.0 billion shillings at 10.47 percent.
The 364-day T-bill slowed down seeing an under-subscription of 2 percent with bids of 9.8 billion shillings against an offer amount of 10.0 billion shillings, this was expected as the 182-day T-bill affected interest in the longer T-bill 8.8 billion shillings was accepted on this issue at a rate of 10.92 percent.
Following closely on the announcement of a new CEO, Kenya Airways (NSE: KQ) is undertaking another notable and key step for its business.
The carrier is seeking approval from American authorities for direct flights from Nairobi to the United States by June 2018 (closely after JKIA was awarded category one security status).
This being a major market for business, trade and tourism we see this as a key strategic step, which coupled with the well-received news of the new CEO, will anchor well for the carrier’s long-term business prospects. Currently the carrier is undergoing a business and capital restructuring exercise to stabilize its balance sheet and return it to profitability.