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February 23, 2019

Kapchorua, Williamson dip on profit alerts

​Britam Holdings MD Benson Wairegi with group finance and strategy director Gladys Karuri on April 19, 2016.
​Britam Holdings MD Benson Wairegi with group finance and strategy director Gladys Karuri on April 19, 2016.

Lots of drama down South. The [South African] Presidency has confirmed that finance minister Pravin Gordhan and his deputy Mcebisi Jonas have been instructed to return immediately to South Africa. No reasons for the instruction were provided. A one sentence statement issued by the Presidency at 11:49am read:

It looks certain that President Jacob Zuma will finally pull the trigger and reshuffle his cabinet.

The South African rand which was trading at a 20 month high of 12.32 versus the dollar when the news broke was last trading at 12.644 - 1.87%t on the day.

The shilling was last trading at 102.86 and probably firms some more from here.The Nairobi All Share rallied +0.62% to close at an 11 week high of 131.42

The Nairobi NSE20 Index gained 20.34 points to close at 3098.16 a 10th January closing high.

Williamson Tea and Kapchorua Tea both issued full year profits warnings.

I quote from Williamson Tea's profit warning announcement

''The anticipated decline in FY profits is attributed in part to uneven and unpredictable weather patterns but more so the primary cause is an inability to control aggressive and rising labour costs.''

Don't get yourself in a twist because both Williamson tea and Kapchorua tea trade at egregious discounts to their net asset value. Williamson tea corrected -4.44% lower to close at 172.00.

Sasini Tea and Coffee firmed +1.11% to close at a fresh 2017 high of 22.75 and is +18.489% in 2017.

Safaricom rallied +1.355% to close at a six and a half week high of 18.70 and traded 13.249 million shares. 19.15 which is the unchanged mark for 2017 is a near term target. .

StanChart Kenya firmed +1.376% to close at a more than five month high of 221.00. StanChart has been the bull outlier at the securities exchange and is +16.93% in 2017. KCB firmed +2.38% to close at 32.25 and is +12.17% in 2017. KCB has rallied +27.77% in March. Equity Bank firmed +0.83% to close at 30.50 on good volume of 5.052m shares.

 Britam Holdings reported FY 16 earnings yesterday where FY revenue upshifted +3.500% to clock 20.291billion, FY profit after tax clocked 4.239 billion versus a FY loss in 15 of [1.009b], FY earnings per share was 1.28 versus a -52cents FY EPS in 2015. Britam announced a 30 cents a share dividend. Britam spoke to the fact that they are now operating in seven countries and that tweeted that "We still retain our position as the market leaders in unit trusts, with stellar growth in our Assets Under Management now at Sh109B" Britam looks inexpensive at these levels. Britam responded +4.455% higher to close at 10.55 and traded 131,700 shares. Britam East Africa is +5.5% in 2017.

Jubilee Insurance reported FY 16 earnings during the trading session where FY 16 revenue increased +13.854% and registered 24.7 billion, FY profit after tax surged +17.778%, FY EPS clocked 50 shillings a share +17.096%. Jubilee is paying a FY dividend of 7.50 a share making that an 8.50 total pay-out and announced a bonus share issue where one bonus share would be given for every 10 held. Jubilee did not trade today at the exchange and is -3.46% in 2017. These were very solid results and I expect some upside price action from these levels. Jubilee is -3.469% in 2017. The Nairobi Securities Exchange surged +7.53% to close at 12.85.

KenolKobil ticked -0.39% to close at 12.80 and on heavy volume action of 4.184m shares.

Aly-Khan Satchu is a financial analyst





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