Equity takes top banking spot with KES 17bn profit

Centum explores KES 8bn bond option in expansion plan

Centum is exploring the possibility of raising an estimated KES 7.5 billion from the bond market to fund its operations in various sectors of the economy. The proposed additional funds are to finance its ambitious strategic plan that will focus on investments in the education, health, energy, financial services, free moving consumer goods (FMCG), ICT and real estate sectors. The non-deal roadshow shows that within the next three years Centum estimates that it will need an additional USD 250 million (KES 22.75 billion) to invest in the eight sectors.

Flame Tree Group acquires spices maker Chirag Kenya

Flame Tree Group which manufactures Zoe body, plastic water tanks and mobile toilets listed in the Nairobi Securities Exchange In November 2014 acquired four brands (Natures Own, Chigs potato crisps, Honeycomb biscuits and gonuts) and 60 employees of a snacks and spices manufacturer, Chirag Kenya, in a bid to grow its revenue. The acquired brands posted a total turnover of KES 90 million last year, indicating a strong potential to boost the company’s top line. Under the new deal, Flame Tree Group will also absorb 60 employees who have been working at Chirag Kenya including the manufacturing plant and its supply resources.

Treasury seeks KES 25bn from 12-year infrastructure bond

The Treasury has launched the sale of a KES 25 billion 12-year infrastructure bond, the bond is for the partial funding of infrastructure projects in transport, and energy sectors. The coupon rate is 11 percent, period of sale 04/03/2015 to 24/3/2015. The principal amount is also going to be repaid over the life time of the bond showing that it is spread out rather than at the end of the period.

Equity takes top banking spot with KES 17bn profit

Equity Group Holdings, the parent company of Equity Bank, announced a KES 17.15 billion profit for the year ended December 2014, 27.8 percent higher than the KES 13.42 billion the bank made a year earlier. Equity’s performance was driven by the mainstay lending business. Net interest income grew by 10.1 percent from KES 26.49bn in 2013 to KES 29.17bn in 2014 driven by stronger loan growth especially driven by increased lending to SMEs. Non-interest income grew by 20.2 percent from KES 15.37bn to KES 18.47bn in 2014. The cost income ratio went up from 49.0 percent in 2013 to 52.0 percent in 2014.This was as a result of a KES 800.0mn one of expense as the bank upgraded its IT infrastructure coupled by additional costs of restructuring . Loans and advances to customers grew by 25.0 percent from KES 171.36bn from KES 214.17bn while customer deposits grew by 26.1 percent from KES 194.62bn to KES 245.38bn.

Barclays closes loan talks with parent as net profit rises 10 percent

Barclays Bank is set to receive a KES 4.5 billion loan from its Londonbased parent after finalizing negotiations for the 10-year debt. Barclays faces a foreign exchange risk since its earnings are in shillings but the loan repayments will be in dollars. The loan is priced at a premium of 2.7 percentage points on the London Interbank Offered Rate (Libor), placing its effective cost at about three per cent based on current market rates. The bank intends to use the loan to boost its capital base. The bank announced a 4.2 percent declined in noninterest income from KES 9.06bn to KES 8.68bn in 2014. Pre-tax income increased by 3.1 percent from KES 11.92bn in 2013 to KES 12.29bn in 2014 while net income grew by 10.0 percent to KES 8.38bn translating to an earnings per share of KES 1.54 in 2014.

Kenyan Stock Market

The NSE 20 share index went down by 0.43 percent w/w from 5,373.22 last week to close at 5,350.30. The NASI Index declined by 0.29 percent w/w from 172.51 last week to close at 172.01.

Turnover, total volumes traded and total market capitalization stood at KES 3.91 billion, 123.57 million and KES 2,401.50 respectively at the end of the week.

EAC Markets

Uganda: The USE ALSI went up by 1.50 percent w/w to close at 2,040.27. The USE LSI also went up this week by 0.29 percent w/w to close at 324.52.

Rwanda: The RSE ALSI and the RSE RSI, remained constant to close at 137.33 and 234.63 respectively.

Tanzania: The DSE TSI declined by 1.38 percent w/w to close at 4,799.20. The DSEI lost 2.09 percent w/w closing at 2,605.04..

Global markets

The S&P 500 declined 0.26 percent w/w to 2,071.26. The Dow Jones Industrial Average shed off 0.27 percent w/w to 17,856.78. The downturn was admist fears that the Federal Reserve will raise interest rates sooner than expected. However banking sector stocks rallied as they announced dividend payments coupled by share buybacks after approval following stress testing initiatives by the Fed.

The Stoxx Europe 600 Index went up 0.04 percent w/w to close at 394.18. European Central Bank commenced quantitative easing to stimulate growth and boost inflation. In addition gains in industrial companies offset declines in energy stocks as the weaker euro boosted exporters creating an overall upturn in the index.

The MSCI Asia Pacific Index closed 1.13 percent lower w/w at 145.46. Asian stocks fell after Chinese industrial output data showed slower industrial growth since 2009 amid speculation the Federal Reserve is moving closer to raising interest rates.