Blog Archive

Thursday, April 24, 2008

Banks on a roll...

Equity Bank is in the process of acquiring Uganda Microfinance Ltd. The smart folks at Equity are doing an all-share deal that will leave their 'extra' capital ready for more investments.

KCB is expanding in Uganda, S. Sudan, Rwanda & Tanzaia. It will go for a Rights Issue to raise KShs 5bn. It has an excellent 1Q 2008 (when the troubles affected large swathes of Kenya) with a record KShs 1.7bn (pre-tax) profits.

Co-op Bank wants to go public. They plan to raise KShs 5bn as well. I think they should go for KShs 10bn & will find takers for the shares since the Safaricom refunds will be itching for an avenue for re-investment. Of course, the other banks will be happy to lend additional funds for the IPO.

Central Bank of Kenya K may be forced to sell the Grand Regency to the highest bidder. It is not all in the bag but I would like to see a transparent auction.
I think the auction should allow the winner to put down 20% and pay the balance within 1 year. This will mean more bidders & a higher price. The 'pay later' will allow bidders to pay more since they can look for additional financing after the bidding process is over. If they default, CBK keeps the 20%.

EABL goes green by building a local plant for canned beer. The cans are made of aluminum & can be recyled. The savings are in transportation since bottles are 'heavy' compared to cans. I hope more jobs are also created by bringing the manufacturing home.

New varieties of rice will boost production in Africa leading to better food security. Why should we 'import' rice, maize & wheat? In addition, self-sufficiency means fewer means for government employees to skim Kenyans (e.g. sugar and maize import scandals). Let the farmers earn a decent living!

We need to force the State (GOK) to give up ownership of assets such as KAA, KPA & KPC. Of course, what I want to see are CLEAN deals meaning no favoritism to entrenched interests.

NEMA after the Nakuru debacle is showing a greater interest in our environment but I have a gut feeling that corruption runs rampant there. Maybe I am being a little too skeptical?

There is light at the end of the tunnel!


bankelele said...
This comment has been removed by the author.
bankelele said...

By my analysis, only one (out of 43) Kenyan banks made a loss in 2007. what other sector/industry has 98% of the companies returning growing profits?

Kenyanomics said...

Equity's move is a direct challenge to Barclays, which acquired Nile Bank (UG's version of Equity) in 08.