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September 23, 2018

KQ stock same despite improvement

Internationally, bond yields in the UK and in Europe have been backing up, admittedly off seriously repressed levels.

The dollar is at a seven month high as investors bet a rate hike is a racing certainty in December in the US.

President Zuma might well have met a worthy adversary in his Finance Minister Pravin Gordhan who is making the president look very exposed in a Sun Tzu way.

If the president is brought under control then the rand could rally very sharply.

The Nairobi All Share firmed +0.24 points to close at 136.82.

The Nairobi NSE20 Index ticked -3.14 points lower to close at 3201.55.

Equity turnover clocked Sh283.17 million and has been on mute in October.

Kenya Airways reported half year 2016 earnings this morning. H1 16 revenue shaded -3.477% lower to register Sh54.748 billion. Kenya Airways reported an operating profit of Sh949 million. The loss before income tax improved +60.138% to clock Sh4.726 billion. Passenger numbers grew +4.2% to 2.2 million.

“Restoring KQ will not happen automatically. We have to look at areas like on-time performance, our debt, pricing and the destinations we fly to. KQ can be salvaged. It is a great airline with a new fleet,” chairman Michael Joseph said.

Clearly this is a significant improvement although Kenya Airways was unable to snap a sequence of losses. Total equity remains negative at Sh38.905 billion. Though cash and cash equivalents improved +66.399% to clock Sh12.425 billion.

The trajectory has improved but it remains a big turnaround. Kenya Airways which had surged +37.75% to a 15 month high in 2016 through yesterday morning, Kenya Airways retreated -8.148% to close at Sh6.20 and traded 1.936 million shares. The point to note is that Kenya Airways was trading at Sh6.75 and unchanged at the finish line, signalling this bout of profit taking might prove very short.

Safaricom closed unchanged at Sh20.00 and traded 6.139 million shares worth Sh122.764 million. I attended the Betway Kenya launch yesterday in the company of Safaricom chief executive Bob Collymore [amongst others] and betting has certainly lifted SMS revenues into strong double digit growth territory.

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