Market News

Mumias slashes staff allowances, freezes pay increments

BY · April 11, 2015 11:04 am

Investor demand for E.A Breweries’s bond surpasses target with KES 9bn bids
The first tranche of E.A. Breweries Ltd bond has attracted over KES 9bn to exceed the KES 5bn target. Investors in the bond will be paid 12.25 percent a year as interest (coupon) for a period of three years.

Due to the oversubscription, an investor will not get the full amount asked for, but will be allocated 55.29 percent of the bid amount. This means the offer does not have a greenshoe option, which allows an issuer to take more than the targeted amount if there is an oversubscription. The fund-raising came only two months after the beer manufacturer retired its KES 5.4bn debut commercial paper taken last year. Potential investors for the three-year paper were required to put in a minimum of KES 100, 000.

Mumias slashes staff allowances, freezes pay increments
Troubled Mumias Sugar Company has halved senior staff allowances and frozen pay increments as it struggles to climb out of the deep pit of losses it fell into two years ago. The company’s board has ordered deep cuts in car allowances paid to managers and supervisors starting March 1. Mumias managing director Coutts Otollo informed staff of the changes, part of a restructuring process initiated by the board.

Sasini looks to profit boost with KES1bn land sale
Agricultural firm Sasini is set to sell 513.7 acres of its leasehold land, a transaction that will earn it KES1 billion and potentially boost earnings in the current financial year. The land sale will be completed through the disposal of its subsidiaries Mweiga Estate and Wahenya Limited which hold 266.7 and 247 acres respectively. This means that Sasini will book a gain of KES1 billion in the transaction, potentially boosting its profit in the current year ending September from the exceptional item. This could in turn see the company raise its dividend in the period, having declared a payout of KES 0.25 per share for the year ended September last year. Proceeds from the sale could also be used to fund fresh investments by the company. The firm said a revaluation of its leasehold land to be worth KES 3.74bn.

Limuru Tea dips into loss as prices fall
Limuru Tea has plunged into full-year loss on falling tea prices that offset an increase in green leaf volumes. The company has reported a KES331 million loss compared to a net profit of KES 28.5mn the previous year, with revenues for the year dipping 11 percent to KES 92 mn. The firm has valued its tea plantation at KES196.7 million down from KES 201.7 mn offsetting any benefit the 14 percent increase in green leaf volumes to 3.4 million kilos made.

Treasury raises KES 24 billion from 12-year reopened bond
The 12-year KES25 billion infrastructure bond tap sale (reopening) has raised KES 24bn, meaning the Treasury has achieved its target of netting KES 50bn from the issue. All the subscriptions to the bond were accepted and allotted at the same fixed yield rate of 11.55 percent like in the first sale of the bond. The infrastructure bond is meant to fund medium and long-term projects in the transport and energy sectors.

Dealing Desk’s View

The NSE 20 and NASI share index went down by 01.40 percent and 2.18percent w/w to close at 5,123.97 and 169.61 respectively. Turnover, total volumes traded and total market capitalization stood at KES 3,131 million, 143.75million and KES 2,367.93trn respectively at the end of the week.

Sasini was the week’s top gainer, going up 18.82 percent to close at KES 17.05.KCB Bank, Eaagads, NIC Bank and Express Kenya capped off the top five gainers appreciating by 4.13 percent, 2.96 percent, 2.70 percent and 1.79 percent respectively.

Limuru Tea was the market’s top loser going down by 15.30 percent to close at KES 24.25. BAT Kenya, Jubilee, Trans Century and Kengen capped off the top five losers shedding off 10.00 percent, 8.77 percent, 8.36 percent and 7.37 percent respectively.
The top movers by volume were led by Safaricom which moved 92.44 million shares accounting for 34.25 percent of the total shares traded throughout the week. Kenol Kobil, KCB Bank, Equity Group and Mumias were the top five most traded stocks in terms of volume. Top movers in terms of turnover were led by Safaricom which traded shares worth KES 1.47bn accounting for 18.60 percent of the week’s turnover. KCB Bank, Equity Group Kenol Kobil and NIC Bank, capped off the top movers by turnover.

Kenyan Stock Market

The NSE 20 and NASI share index went down by 01.40 percent and 2.18percent w/w to close at 5,123.97 and 169.61 respectively.
Turnover, total volumes traded and total market capitalization stood at KES 3,131mn, 143.75mn and KES 2,367.93trn respectively at the end of the week.

EAC Markets

Uganda: The USE ALSI declined by 2.58 percent w/w to close at 2017.35. The USE LSI notched this week by 0.01 percent w/w to close at 324.14.

Rwanda: The RSE ALSI and the RSE RSI declined by 0.09 percent and 0.46 percent w/w respectively to close at 137.16 and 233.14 respectively.

Tanzania: The DSE TSI gained 0.94 percent w/w to close at 4,819.55. The DSEI also went up by 0.14 percent w/w closing at 2,693.14.

Global markets

The S&P 500 went up 1.27 w/w to close at 2,066.96. The Dow Jones Industrial Average also went up 1.27 percent w/w to 17,763.24. U.S. stocks closed higher after trading in a narrow range as investors digested a rebound in oil prices and looked for more signals on the timing of an interest rate hike.

The Stoxx Europe 600 Index went up 3.25 percent w/w to close at 398.52. The Stoxx 600 has rallied as the European Central Bank started a quantitative-easing program. The one from the Federal Reserve helped U.S. shares more than triple from a 12-year low in March 2009.

The MSCI Asia Pacific Index closed up 2.64 percent w/w to 147.94. Asian stocks closed mostly higher after Greece repaid a 450 million euro loan it owed the International Monetary Fund on Thursday. A set of strong economic reports from the euro-currency bloc and continued hopes that China’s central bank could ease its monetary policy further also underpinned investor sentiment.