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Playing the market 2014 - 2016
stocksmaster
#1 Posted : Thursday, January 02, 2014 7:51:57 PM
Rank: Member


Joined: 9/26/2006
Posts: 377
Location: CENTRAL PROVINCE
The previous playing the market endeavors have focused on a 1 year period which have been more of speculation and less of investment.

In 2010: http://www.wazua.co.ke/f...aspx?g=posts&t=5551

In 2011: http://wazua.co.ke/forum.aspx?g=posts&t=10373

In 2012: http://www.wazua.co.ke/f...spx?g=posts&t=16435

The year 2013 was a good year for many investors. This year, I only traded for 3 quarters (April to Dec 2013) through Coop Bank (Bought at 15 sold at 18s), Equity Bank (Bought at 32.75, sold at 35.75), CFC Stanbic (Bought at 60) and Safaricom (Bought at 7.50 sold at 11).

The capital gains from these shares have delivered satisfactory results well above the 19.2% NSE 20 share Index rise for 2013. By End of year 2013, I had sold the Coop, Equity and Safaricom shares and await my target price of Ksh 100 for CFC Stanbic at which point I will consider whether to continue holding the share or book profits.

The objective of playing the market 2014-2016 is to double capital gains within the three year period. As such, the shares I have chosen over this period of time are those which I consider to offer the greatest chance to achieve this objective based on my projections.

Despite a target of holding for three years, I will be reviewing the performance quarterly just to update on progress.

1. DIAMOND TRUST BANK

Purchase Price: Ksh 192
Currently trading at (Year 2012) EPS of 17.5 and P/E of about 11.
• DTB has by far the best quality of loan book of the listed banks. Its NPL ratio as at Q3 2013 was 1.1%. (Compare with KCB 8.4%, Equity 5.5%, Coop 4.6%, Stanchart 3.0%, Barclays 3.0%, NBK 12%, and HFCK 8.2%). The rising NPL ratio in most of these banks should be a source of concern especially if by Q4 2013 the ratio is not reducing.
• DTB also has the most prudent loan loss provision policy; as at Q3 2013, its NPL Coverage was 96.1%. (Compare with KCB 44.5%, Equity 42.7%, Coop 51.5%, Stanchart 24.2%, Barclays 83.3%, NBK 42.5%, HFCK 14.2%).
• The bank is regionally diversified with almost a quarter of its profits coming from its regional subsidiaries in Tanzania, Uganda and Burundi.
• One of its major shareholders (Habib Bank) has indicated an intention to increase ITS shareholding in the bank from 11% to 26% over a period of 5 years. With another major Pakistani Bank already conducting due diligence on a smaller Kenyan bank for acquisition, it is evident the Pakistanis are getting attracted to the Kenyan Financial Sector. The 15% additional shares will be sourced by Habib Bank from the NSE market ensuring a constant source of demand for the DTB Shares at the NSE.

MY 3 YEAR PROJECTIONS ON DTB:

The growth in EPS for 2013 as compared to 2012 is about 35-37%. I estimate that the bank will maintain a similar growth trajectory. The growth will result from a conservative dividend policy with the retained profits being used to finance growth in loan book, opening of new branches and acquire more shares in its subsidiaries (Uganda – currently at 57% shareholding, Tanzania – currently at 63%, Burundi – currently at 64%).
I assumed a conservative 25% year on year growth in EPS plus assumed a P/E of 10 to arrive at my projections.

Projected EPS for Financial Year Ending Dec 2013: Ksh 24; Target Price by April 2014; Ksh 240
Projected EPS for Financial Year Ending Dec 2014: Ksh 30; Target Price by April 2015; Ksh 300
Projected EPS for Financial Year Ending Dec 2015: Ksh 37.50; Target Price by April 2016; Ksh 375
Projected EPS for Financial Year Ending Dec 2016: Ksh 46.9; Target Price by April 2017; Ksh 469

(Purchase Price – Ksh 192, Target Price after doubling of capital gains Ksh 384 hence target may be achieved by July 2016).

2. TPS SERENA (E.A)

Purchase Price: Ksh 46
Currently trading at (Year 2012) EPS of Ksh 3.60 ; P/E of about 12.8 and at Book Value.

• The share is greatly influenced by travel advisories and negative publicity events such as happened this year with the JKIA Fire and the Westgate Terrorism Attack. The security uncertainties occasioned by the Kenyan elections having been held this year further compounded the negative fortunes for this share for 2013 as tourist numbers were depressed.
• The Jubilee government seems committed towards improving the tourist numbers with a target of 3M tourists by 2015.Further, the single tourist visa for Kenya, Uganda and Rwanda in addition to a joint marketing strategy by the 3 countries (eg a single tourism expo stand at tourism trade fairs to market East Africa as one rather than individual countries) should generate good synergy. This will be very beneficial for Kenya especially in targeting tourists from countries where their governments have issued travel advisories against Kenya in particular but not the other East African Countries.
• TPS Serena E.A has a good regional diversification that mitigates against country specific risks. It is present in Kenya, Tanzania, Uganda and Zanzibar. It is also managing hotels in Rwanda, Mozambique and soon Burundi.
• In Jan 2013, it acquired a 79.2% stake in TPS Uganda ensuring that Uganda will contribute almost a quarter of its profits going forward, with Kenya contributing less than half and the other countries contributing the remaining quarter of profits hence further mitigating risks.
• The Kampala Serena sits on 17 acres and TPS Serena is exploring the possibility of further diversification into Real Estate through Office Space and Shopping Mall development within the expansive land.
• Historically, TPS Serena E.A has issued bonus shares on a three year cycle as follows:
2007 – 1:5 Bonus Issue ; 2010 – 1:6 Bonus Issue
I forsee a mixed rights and bonus issue to accompany end of year 2013 results. The management had indicated that in 2013, it would evaluate the need for refurbishment of Nairobi Serena Hotel (Estimated to cost Ksh 3B to refurbish rooms and expand the hotel). A 50:50 Equity: Debt financing of the refurbishment is likely with a Ksh 1.5B Corporate bond and a 1.5B rights issue mixed with a bonus issue. The increasing number of newer international hotels coming up will require an urgent refurbishment of Nairobi Serena in order for it to retain its competitiveness and hence the likelihood of the rights/corporate bond issue in 2014.
The increasing number of international chain hotels setting camp in Kenya highlights the positive outlook for this sector.

MY 3 YEAR PROJECTIONS ON TPS SERENA E.A:
The challenging business environment for tourism in 2013 will most probably result in flat 2013 financial results as compared to 2012. However, it is important to note that the TPS Serena E.A is currently trading at Book Value (P/BV of 1). My projections are based on a recovery of tourism in 2014 up to 2016, a P/E of 15, and at least a P/BV of 1.2. (Sector Average P/E is 21 hence my estimate is very conservative)
Projected EPS for Financial Year Ending Dec 2013: Ksh 3.60 (2012 – Ksh 3.60); Target Price by April 2014; Ksh 54 (If a 1:5 Bonus Issue then Target Price of Ksh 65)
Projected EPS for Financial Year Ending Dec 2014: Ksh 5; Target Price by April 2015; Ksh 75
Projected EPS for Financial Year Ending Dec 2015: Ksh 6; Target Price by April 2016; Ksh 90
Projected EPS for Financial Year Ending Dec 2016: Ksh 7.20; Target Price by April 2017; Ksh 108
(Purchase Price – Ksh 46, Target Price after doubling of capital gains Ksh 92 hence target may be achieved by July 2016).

3. HOUSING FINANCE COMPANY OF KENYA (HFCK)

Purchase Price: Ksh 31.25
Currently trading at (Year 2012) EPS of Ksh 3.22 and P/E of about 9.7 and at P/BV of 1.3

• The Key risk for HFCK is the changes in the law regarding loan recovery which may explain the NPL ratio of 8.2%. The company also seems to be under provisioning with an NPL Coverage of 14.2%. However, its rapid growth and a conservative P/BV ratio makes HFCK a good buy going forward.
• Its strategy to partner with land owners in developing property will greatly diversify its sources of revenue, provide synergy to its mortgage business and impact positively on its profitability.
• The 20B Bond should inject significant capital into the business.
• It is poised to be a major player in the D-REITs market.
• HFCK remains a potential Equity Bank acquisition target especially if it continues posting such a strong growth trajectory compared to Equity bank (Q3 2013M – Equity Bank year on year earning was up only 7.3% vs HFCK 58.7%). The Equity bank growth seems to have hit a plateau necessitating some degree of business reengineering to satisfy its shareholders who are used to stratospheric returns. An acquisition of HFCK would be a logical strategy as it would provide a nice addition to Equity Banks bottom line, reduce the operating costs of HFCK through merging of departments with Equity’s and considerably boost the operating capital and liquidity of HFCK especially now as it embarks on the capital intensive property development business. (Similar to KCB absorbing S&L in 2009).Equity owns 24.9% of HFCK.

MY 3 YEAR PROJECTIONS ON HFCK:

My projections are based on a P/E of 9, and a 25% growth in earnings. (Sector Average P/E is about 10 hence a Conservative P/E of 9 adopted)

Projected EPS for Financial Year Ending Dec 2013: Ksh 4.24 (2012 – Ksh 3.22); Target Price by April 2014; Ksh 38.15
Projected EPS for Financial Year Ending Dec 2014: Ksh 5.30; Target Price by April 2015; Ksh 47.75
Projected EPS for Financial Year Ending Dec 2015: Ksh 6.625; Target Price by April 2016; Ksh 59.50
Projected EPS for Financial Year Ending Dec 2016: Ksh 8.28; Target Price by April 2017; Ksh 74.50

(Purchase Price – Ksh 31.25, Target Price after doubling of capital gains Ksh 62.50 hence target may be achieved by July 2016).

4. UPCOMING RIGHTS ISSUES 2014

Several companies eg KenGen, Uchumi will be conducting rights issues presenting a good opportunity to purchase a stake in them. The pricing will however be key in making investment decisions in the forthcoming rights and hence will be updating once the rights details are released.

I will also be scouting for more companies to bring the total no. of companies to about 5-6.

SUMMARY OF FUNDS ALLOTMENT:

DTBK – 30% OF FUND
TPS SERENA E.A – 20% OF FUND
HFCK – 10% OF FUND
CASH – 40% OF FUND (To be invested in 2-3 more companies as opportunities arise through rights or market bear conditions).

Happy Hunting.

(Twitter: stocksmaster@stocksmaster79)
gatoho
#2 Posted : Thursday, January 02, 2014 8:04:40 PM
Rank: Member


Joined: 1/1/2010
Posts: 505
Location: kandara, Murang'a
The legend talks, We listen and take notes
Foresight..
omega
#3 Posted : Thursday, January 02, 2014 8:47:57 PM
Rank: Member


Joined: 6/9/2009
Posts: 69
Thanks stocksmaster for sharing. I believe DTB and HFCK are excellent choices.

Here is my current portfolio:

ARM - bought at < 90 in 2009
HFCK - bought at < 16 towards the end of 2012
DTB - bought at < 90 in 2009-2010
Jubilee - bought at < 170 in 2012
SCAN - bought at < 25 in 2009 and sold at 65 at the beginning of 2013 to finance a real estate project, and now re-entering at < 50
KK - the laggard in my portfolio (bought at ~10 in 2011), but hopeful of recovery in 2014
guru267
#4 Posted : Thursday, January 02, 2014 8:53:00 PM
Rank: Elder


Joined: 1/21/2010
Posts: 6,665
Location: Nairobi
TPS might be the dog of that portfolio.. But otherwise nice so far!
Mark 12:29
Deuteronomy 4:16
vastcapital
#5 Posted : Thursday, January 02, 2014 10:09:55 PM
Rank: New-farer


Joined: 10/10/2010
Posts: 51
Location: Nairobi

DTBK and HF are promising stocks. What about NBK a rights issue is planned in the 1st quarter coupled by change of mgt and new ways of doing business.
sparkly
#6 Posted : Thursday, January 02, 2014 10:45:42 PM
Rank: Elder


Joined: 9/23/2009
Posts: 7,285
Location: Enk are Nyirobi
My Portfolio is as follows:

Security-WAP(cost) - % Portfolio
CENTUM - 13 - 25%
KENGEN - 10 - 21%
HF - 14 - 18%
NIC - 29 - 9%
KCB - 24 - 8%
KQ - 14 - 6%
TPS - 45 - 6%
KK - 13 - 5%
UCHUMI - NM - 1%

My plans for 2014 are:
1. Lighten - Kengen, NIC, KCB, KK
3. Accumulate- HF, Centum, KQ, TPS
4. Don't care - Uchumi

I foresee a bear in 2015 where i will accumulate the following at the right prices - EABL, NMG, ARM, Kakuzi.
Life is short. Live passionately.
young
#7 Posted : Thursday, January 02, 2014 10:49:27 PM
Rank: Elder


Joined: 6/20/2007
Posts: 1,882
Location: Lagos, Nigeria
Happy new year dear @stocksmaster

Good job as usual. Good to hear you
are considering a longer horizon 3 years
rather than 1. Invariably investing for capital
gain with a min target of doubling the price.

Your 2013 one year Selection
Coop Bank
Eqty
safaricom
cfc stanbic

Your 2014 three year Selection
DTB
TPS Serena
HFCK
RIght Issue

Please consider substituting TPS serena
with a better counter with realistic targets
not assumptions.
For doubling your investments in 12 to 24
months there are better substitutes like
- Safaricom
- Centum (I dont invest in centum because
of her dividend policy but for sure
there is room for growth)

Also choose between CFC stanbic and DTB
as for me with CFC stanbic at 86 from 60 bob
you came from there is no point waiting for
100 as the margin from 86 /95 to 100 is small if
you are so sure of DTB. This is because due to planned
CBK fiscal and monetary policies in. 2014, it may not
be uhuru for the banking sector .

Please once again do not allow TPS Serena to become
another Equity of 2013 in your portfolio to spoil
your 2014 - 2016 show. Kenya is yet to holistically
address ext security issues so tourists arrival
numbers will not be as projected by govt.
Other than rights issue there are better substitutes
that can return salutory results, I believe you know them
better than me.
This is purely my friendly and candid opinion as I am
not the witty @stockmaster and will never be.

Best Regards
mzee young
Lagos, Nigeria


The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
young
#8 Posted : Thursday, January 02, 2014 10:58:44 PM
Rank: Elder


Joined: 6/20/2007
Posts: 1,882
Location: Lagos, Nigeria
sparkly wrote:
My Portfolio is as follows:

Security-WAP(cost) - % Portfolio
CENTUM - 13 - 25%
KENGEN - 10 - 21%
HF - 14 - 18%
NIC - 29 - 9%
KCB - 24 - 8%
KQ - 14 - 6%
TPS - 45 - 6%
KK - 13 - 5%
UCHUMI - NM - 1%

My plans for 2014 are:
1. Lighten - Kengen, NIC, KCB, KK
3. Accumulate- HF, Centum, KQ, TPS
4. Don't care - Uchumi

I foresee a bear in 2015 where i will accumulate the following at the right prices - EABL, NMG, ARM, Kakuzi.


Please after waiting so long dont lighten KK
when it is about to explode.
Also KCB is an old reliable horse.
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
mkeiy
#9 Posted : Friday, January 03, 2014 9:35:14 AM
Rank: Member


Joined: 1/27/2012
Posts: 851
Location: Nairobi
@stockmaster,
Hats off! Applause Applause Applause Applause Applause Applause Applause Applause Applause

On TPS, i'm beginning to have doubts. The tourist numbers are not that impressive thanks to negative publicity out there and insurance issues. Tanzania is the country basking in those numbers.Our loss, their gain.
I intend to exit TPS and load more of KK and some Mpesa bank for the next 18 months.
dunkang
#10 Posted : Friday, January 03, 2014 10:31:10 AM
Rank: Elder


Joined: 6/2/2011
Posts: 4,808
Location: -1.2107, 36.8831
I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.
Receive with simplicity everything that happens to you.” ― Rashi

kollabo
#11 Posted : Friday, January 03, 2014 11:18:31 AM
Rank: Veteran


Joined: 2/3/2012
Posts: 1,317
@stocksmaster superb analysis. Its up there with the very best. May I spice up your 40% Cash fund into insurance I would say 20% CFCI and 10% each for PAFR & CIC.
mkonomtupu
#12 Posted : Friday, January 03, 2014 11:50:55 AM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,000
Location: River Road
sparkly wrote:
My Portfolio is as follows:

Security-WAP(cost) - % Portfolio
CENTUM - 13 - 25%
KENGEN - 10 - 21%
HF - 14 - 18%
NIC - 29 - 9%
KCB - 24 - 8%
KQ - 14 - 6%
TPS - 45 - 6%
KK - 13 - 5%
UCHUMI - NM - 1%

My plans for 2014 are:
1. Lighten - Kengen, NIC, KCB, KK
3. Accumulate- HF, Centum, KQ, TPS
4. Don't care - Uchumi

I foresee a bear in 2015 where i will accumulate the following at the right prices - EABL, NMG, ARM, Kakuzi.


@sparkly, you have too many companies in your portfolio. How do you manage to follow up. Lose kk, KQ & consolidate some of the finacials.

İ have only 3 companies Nic, uchumi & kengen and i plan to buy aggressively during the rights issues.

Metasploit
#13 Posted : Friday, January 03, 2014 12:02:27 PM
Rank: Veteran


Joined: 3/26/2012
Posts: 985
Location: Dar es salaam,Tanzania
dunkang wrote:
I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
Metasploit
#14 Posted : Friday, January 03, 2014 12:17:25 PM
Rank: Veteran


Joined: 3/26/2012
Posts: 985
Location: Dar es salaam,Tanzania
Metasploit wrote:
[quote=dunkang]I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html[/quote]

For trading,Kengen is good.It always swings and now it is really oversold.Rebound in the offing.Just like Safcom,it doesnt disappoint traders

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
Aguytrying
#15 Posted : Friday, January 03, 2014 4:11:12 PM
Rank: Elder


Joined: 7/11/2010
Posts: 5,023
Well My portfolio is similar to the one of stocksmaster, but I have been holding for over 1 year now.

HFCK (14) 20%
TPSEA (49) 35%
KK (9.5) 25%
CFC Bank (66) 20%

Still holding. and happy to hold.
The only stock i would add to my list is I&M bank. It has more potential than DTB in my view, and has a healthy dividend, just wait for it when its announced!

Strangely, i Would speculate in EABL at 290.00, and EQuity at 31.00, coz its at a relative discount.

On TPSE. Intrestingly one of the reasons im investing on TPSEA( apart from undervaluation) is coz of GOV commitment to grow tourism numbers. Glad to be thinking like the gurus.
The investor's chief problem - and even his worst enemy - is likely to be himself
stocksmaster
#16 Posted : Friday, January 03, 2014 4:34:12 PM
Rank: Member


Joined: 9/26/2006
Posts: 377
Location: CENTRAL PROVINCE
Metasploit wrote:
Metasploit wrote:
[quote=dunkang]I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html[/quote]

For trading,Kengen is good.It always swings and now it is really oversold.Rebound in the offing.Just like Safcom,it doesnt disappoint traders


With a forthcoming 1:1 rights issue within the next 3-6 months, it will be interesting to see if the government will take up its rights. If it doesn't, then its 70% shareholding should reduce to 35% and a reorganisation of the mainly politically appointed board of directors should follow. Kengen needs a serious anchor shareholder with expertise In energy sector (equivalent of Vodafone in Safaricom). Before the rights are done and dusted, the share should be available at the Ksh 10 price levels as the market waits to see the governments move as concerns the rights (hopefully it will sell its rights to an anchor shareholder) in addition to the rights pricing.

Happy hunting.
snipermnoma
#17 Posted : Friday, January 03, 2014 6:19:52 PM
Rank: Member


Joined: 1/3/2014
Posts: 257
Wazuans,

I am a new member freshly minted, I stumbled upon this site as I was doing research on stocks. I have a few comments and questions.

First is to thank all of you for contributing this great content.

Second I went through the links to the previous years topics. @stocksmaster you were speculating and had 1 year targets. With the new 3 year target are you still speculating or this is more for the medium term? Are your targets here for your "speculation account" only or for both "speculation" and "long term" account?

Third I think the three picks are good, with TPSE being my least favorite of the three. I think there are other options that will do better over the course of 3 years e.g. Centum, Britam

Fourth Some thoughts. I am reentering the market having sold all my holdings late last year. Before I stumbled on this, my plan was:

30% Housing Finance
20% Britam or Centum
20% Transcentury or EA Cables
30% Rights Issues: Kengen, Uchumi, NBK

Again thanks all. I am glad to be here.


The fear of the Lord is the beginning of Wisdom
murchr
#18 Posted : Friday, January 03, 2014 6:58:46 PM
Rank: Elder


Joined: 2/26/2012
Posts: 14,875
stocksmaster wrote:
Metasploit wrote:
Metasploit wrote:
[quote=dunkang]I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html[/quote]

For trading,Kengen is good.It always swings and now it is really oversold.Rebound in the offing.Just like Safcom,it doesnt disappoint traders


With a forthcoming 1:1 rights issue within the next 3-6 months, it will be interesting to see if the government will take up its rights. If it doesn't, then its 70% shareholding should reduce to 35% and a reorganisation of the mainly politically appointed board of directors should follow. Kengen needs a serious anchor shareholder with expertise In energy sector (equivalent of Vodafone in Safaricom). Before the rights are done and dusted, the share should be available at the Ksh 10 price levels as the market waits to see the governments move as concerns the rights (hopefully it will sell its rights to an anchor shareholder) in addition to the rights pricing.

Happy hunting.


I believe so too about GOK and KENGEN tho the Gov is keen on the sector so they will make sure they are the major shareholder tho diluted. I think there is a reason why GE is here...am watching
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
stocksmaster
#19 Posted : Friday, January 03, 2014 7:10:40 PM
Rank: Member


Joined: 9/26/2006
Posts: 377
Location: CENTRAL PROVINCE
murchr wrote:
stocksmaster wrote:
Metasploit wrote:
Metasploit wrote:
[quote=dunkang]I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html[/quote]

For trading,Kengen is good.It always swings and now it is really oversold.Rebound in the offing.Just like Safcom,it doesnt disappoint traders


With a forthcoming 1:1 rights issue within the next 3-6 months, it will be interesting to see if the government will take up its rights. If it doesn't, then its 70% shareholding should reduce to 35% and a reorganisation of the mainly politically appointed board of directors should follow. Kengen needs a serious anchor shareholder with expertise In energy sector (equivalent of Vodafone in Safaricom). Before the rights are done and dusted, the share should be available at the Ksh 10 price levels as the market waits to see the governments move as concerns the rights (hopefully it will sell its rights to an anchor shareholder) in addition to the rights pricing.

Happy hunting.


I believe so too about GOK and KENGEN tho the Gov is keen on the sector so they will make sure they are the major shareholder tho diluted. I think there is a reason why GE is here...am watching


I suspect GE wants in. The investments projected do need the stewardship of such a player. However, i doubt GE would invest without Board control.

Happy hunting.
VituVingiSana
#20 Posted : Friday, January 03, 2014 9:10:48 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,421
Location: Nairobi
stocksmaster wrote:
Metasploit wrote:
Metasploit wrote:
[quote=dunkang]I am thinking of picking KPLC (~13) or KenGen (~12), but am worried about the GoK anti-business inteference in the energy sector.


it worries alot.

Too political.

http://allafrica.com/stories/201401030404.html[/quote]

For trading,Kengen is good.It always swings and now it is really oversold.Rebound in the offing.Just like Safcom,it doesnt disappoint traders


With a forthcoming 1:1 rights issue within the next 3-6 months, it will be interesting to see if the government will take up its rights. If it doesn't, then its 70% shareholding should reduce to 35% and a reorganisation of the mainly politically appointed board of directors should follow. Kengen needs a serious anchor shareholder with expertise In energy sector (equivalent of Vodafone in Safaricom). Before the rights are done and dusted, the share should be available at the Ksh 10 price levels as the market waits to see the governments move as concerns the rights (hopefully it will sell its rights to an anchor shareholder) in addition to the rights pricing.

Happy hunting.
Too many contracts up for grabs for GoK to let their shareholding fall below 50% + 1
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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