KENGEN Eyes More Loans as Portland Cement Audit Finds KES 3 Bn Insolvency-Share Price Drops 6.43pc

The Kenya Electricity Generating Company’s debt level has dropped to a five-year low, giving the power firm headroom to chalk up more loans for financing of new projects.

The drop-in debt level was helped by the June rights issue that saw KenGen’s debt-to-equity ratio drop thanks to the 26.4 billion shillings injected in new equity. The listed power producer’s gearing ratio — the proportion of debt to equity — dropped to 43 percent as at June 2016 from a high of 94 percent in 2011.

In other news, the Auditor-General Edward Ouko has offered a gloomy assessment of East African Portland Cement Company (EAPCC), casting doubts on the firm’s ability to stay afloat with a 2.8-billion-shilling hole in its balance sheet.

Mr. Ouko, in an audit report prepared on his behalf by consultancy firm Deloitte, says that Portland’s current liabilities of 4.96 billion shillings have grossly exceeded its current assets of 2.11 billion shillings, leaving it technically insolvent. This means that if EAPCC creditors recalled their liabilities today, the State-owned cement firm would not be in a position to settle them within one year.

 At the Nairobi Security Exchange on Monday, the equities market opened the week on a mild note on as two of the three indices were in the green.

The NSE 20 Share Index gained 4.14 points to close the day at 3268.41 points while the All Share Index reduced by a marginal 0.63 points to end the day at 139.38 points. The NSE 25 Share Index added 16.29 points to 3692.36 points seen previously to settle at 3268.41 points.

Market capitalization dropped slightly to 2019.31 billion shillings from 2028.545 billion shillings whilst equity turnover advanced by 3.93 percent to 0.51 billion shillings from 0.49 billion shillings before as volumes traded declined to 16.40 million from 22.02 million on Friday.

The Kenya Shilling on the other hand remained stable against the US dollar on Monday but slight weakening attributed to increased demand from importers and multination companies was witnessed and which is expected to continue tomorrow.

The confirmation of a Trump victory has seen the Pound move from strength to strength against the likes of the Euro and Dollar, fueled entirely on market speculation as to what a Trump presidency may manifest itself as most view it as likely to be positive.

(Information gotten from Kingdom Securities)