Crown Paints Delays Release of FY16 Results as Turnover at the Bourse Flattens

Crown Paints Limited has joined Trans-Century Ltd and Uchumi Supermarkets Ltd in delaying the announcement and the release of 2016 Financial Year results even as the First Quatre for 2017 comes to an end.

According to the statement from Crown Paints, the delay in announcing the results is due to the ongoing challenges in the consolidation of results from subsidiaries and delay in obtaining regulatory approval in Tanzania.

First half numbers (1H16) recorded a 58.5 percent upsurge in net earnings despite a 57 percent decline in cash from operations. The slow cash flow situation is not unique to the company as a few other cash generative businesses had similar challenges in 2016.

The announcement comes barely a day after the paint manufacturer became the first paint manufacturing company in Kenya to launch a loyalty program for painters which is to be administered via a digital App for painters to register for rewards, special offers as well as skill development training.

At the bourse on Wednesday, secondary market turnover remained flat at 2.1 billion shillings with the focus spreading out more evenly between the shorter tenors and the long end of the curve.

The infrastructure bonds at the NSE also saw activity, although as expected the resistance level of 12.50 percent has been hard to cross for the 2015 and 2016 issues.

Supply came in on Wednesday on the IFB1/2015/9 and the IFB1/2016/9 issues causing a slight bounce back up on the bid yields to 12.60 and 12.65 percent respectively. According to economic analysts, Genghis Capital, the market is expected to be supplied on more issues across the yield curve on Thursday as a number of investors get spooked once the bond issue is confirmed.
The overnight rate continued to drop albeit marginally closing at an average of 6.016 percent on volumes of 10.0 billion shillings, despite improved liquidity the regulator chose to sit out of the OMO market as well sighting a square market yesterday.

On Thursday morning, according to Genghis Capital, the market turnover has already picked up marginally with Safaricom Ltd (NSE: SCOM) holding as the highest traded counter. The 19.90 shillings’ level as resistance and expect to see a retest of a previous high on the counter. If a breach is achieved, the counter is expected to close above 20.00 shillings.

Diamond Trust Bank Kenya Ltd (NSE: DTK) exuded high block movements in the last two trading sessions with foreign investors being net sellers in yesterday’s session, however, the counter remained unmoved in price.