Francis Drummond and Company Limited

08/10/2024

02/10/2024

Today’s News Highlights

▪ Banks offered bond swap as KQ misses Sh19bn loans deadline
Top commercial banks will convert Sh19.3 billion ($149.9 million) worth of loans advanced to Kenya Airways (KQ) into Treasury bonds after the deadline for settling the debt lapsed.

▪ State loans diverted to salaries, utilities nearly double to Sh416bn
The government spent Sh415.7 billion or more than half of the cash it borrowed in the financial year ended June 2024 on recurrent expenses such as payment of salaries and utilities in breach of the law, highlighting the impact of missed tax collections amid spending pressure.

▪ NSE investor wealth rebounds, increases by Sh237 billion
Investor wealth on the Nairobi Securities Exchange (NSE) rose by Sh237.2 billion in the nine months to September 2024, reversing the losses seen a year earlier as foreign investors cut down on their exits from the market.

▪ Britam eyes investors with fixed-income dollar fund
Britam Asset Managers, a subsidiary of Britam Holdings, have launched a US dollar- denominated fixed-income fund, widening investment options for its clients eyeing foreign currency-based facilities.

▪ Bank lending rates up in August despite CBK rate cuts
The average lending rate by commercial banks rose marginally in August despite a cut on the indicative rate by the Central Bank of Kenya (CBK), denying borrowers the much-anticipated relief.

Courtesy: Business Daily

02/10/2024

ABC of investing in shares....

25/09/2024

Today’s News Highlights

▪ Kenya Eurobond yields fall amid global interest rate cuts
Yields on Kenyan Eurobonds moved lower last week amid the start of global rate cuts, which have served as a prelude to a drop off in the return earned from sovereign debt instruments in the international capital markets.

▪ Counties go two months with no fresh Exchequer cash
County governments have endured the first two months of the 2024/25 financial year without fresh Exchequer funding, as Parliament drags the legislation of a framework to anchor fresh disbursements to the devolved units.

▪ Bamburi share price falls 22pc after dividend date
The Bamburi share shed 22.4 percent in trading yesterday at the Nairobi Securities Exchange (NSE) following the closure of the firm's shareholder register on a Sh18.35 special dividend on Friday.

▪ Net external borrowing to halve to Sh167bn in next financial year
Kenya's net external borrowing in the next financial year (2025-26) is expected to more than halve to Sh166.7 billion from Sh355.5 billion in the current year, courtesy of a sharp increase in principal debt repayments that will need to be rolled over using new borrowing.

▪ Safaricom avoids price war with Starlink in Internet market race
Safaricom has avoided a price war with billionaire Elon Musk's Starlink and instead raised its home fibre Internet speeds by up to five times in efforts to protect revenues and guard its customer base.

Courtesy: Business Daily

19/09/2024

News Highlights

▪ How deleted emails, SMSs may derail NSSF bonds trade probe
A leaked central bank letter on suspected irregular trading of the National Social Security Fund (NSSF) government bonds could derail investigations into the matter amid fears the suspects may have moved to destroy some key evidence.

▪ Importers face losses on new insurance processing charges
Importers risk increased storage costs on delayed clearance of thousands of shipments after an intermediary firm imposed new fees on the processing of customs bond insurance.

▪ Sacco loans, deposits gap hits Sh76bn on increased borrowing
Loans issued by savings and credit cooperative societies (saccos) continued to outpace members' deposits in the year to December 2023, new sector data shows.

▪ Laptrust in Sh3.5bn redesign of Mombasa's Changamwe estate
The Local Authorities Pension Trust (Laptrust) is set to redevelop a seven-acre estate it owns in Mombasa County's Changamwe area at a cost of Sh3.5 billion.

▪ Cytonn seeks to stop Superior Homes sale of 12 percent stake
The promoters of investment firm Cytonn have sued Superior Homes over the planned sale of their 12.5 percent stake in the real estate developer, as part of plans to raise funds for compensating investors who lost Sh14 billion in the various Cytonn entities.

▪ Sacco accounts with over Sh100,000 hit 1.1 million
Savings and credit cooperative societies (saccos) accounts with more than Sh100,000 grew at the fastest pace in five years to hit 1.1 million at the end of last year, defying the economic hardships facing many Kenyans.

▪ KRA's August tax collections in rare Sh9.2bn fall on jitters
Tax collections in August suffered a rare drop on the back of depressed sales at the height of economic uncertainties that followed deadly anti-government protests, Treasury data shows.

▪ IMF further delays approval of fresh funding to Kenya
The International Monetary Fund (IMF) has further delayed the approval date for new funding to Kenya amid a lack of consensus on new revenue targets following withdrawal of the contentious Finance Bill, 2024.

▪ KMRC to skip bond issue again on high interest
The Kenya Mortgage Refinance Company (KMRC) has for the second consecutive year deferred plans to issue another bond, put off by high interest rates on government papers.

▪ KQ targets up to Shlbn savings on digitised passenger services shift
National carrier, Kenya Airways targets savings of up to Shlbillion as it switches to digitised passenger management systems.

Note: The US cut the rates by a surprise 0.50%, we may expect some heavy movements in Equities moving forward.

12/09/2024

Today’s News Highlights

▪ Bond trades lift stockbrokers commissions 31pc
Stockbrokers enjoyed a 31 percent jump in trading commissions in the first half of the year ended June on increased volumes of bond trades on the Nairobi Securities Exchange (NSE), easing the impact of falling advisory fees on their profits.

▪ Longhorn cuts losses to Sh238m on high revenue
Longhorn Publishers cut its net loss by 58.4 percent to Sh237.9 million in the financial year ended June 2024 as increased sales pulled it from the worst performance since listing on the Nairobi Securities Exchange.

▪ KRA spies uncover Sh79bn in raid on wealthy tax cheats
Kenya Revenue Authority (KRA) investigators have flagged 511 companies and individuals for suspected tax evasion and fraud worth Sh79.3 billion based on intelligence received from bank, mobile money transactions and assets registrations.

▪ Local interest rates peak, risk terms ease
Domestic interest rates have peaked, pointing to a pause on high-risk environment that had catapulted the rates to years' records after the Central Bank of Kenya (CBK) raised its benchmark lending figure to counter the effects of runaway inflation and currency exchange volatility.

▪ Pay squeeze, layoffs force 1.45m out of sacco savings
The number of dormant members in savings and credit cooperative societies (saccos) grew 18.6 percent to 1.45 million in the year ended December, pointing to deeper job cuts and squeezed pay in Kenya's soft economy amid fears the co-operatives would struggle to mobilise deposits for lending.

Courtesy: Business Daily

11/09/2024

Today’s News Highlights

▪ 1.5 million idle NSE accounts frozen as IPO drought bites
About 97.5 percent or 1.5 million accounts used for share trading at the Nairobi Securities Exchange (NSE) have been frozen after remaining inactive for over two years, revealing the apathy among retail investors who entered the market during the 2000s initial public offering (IPO) boom.

▪ Treasury fears losing Sh214bn if 2023 Finance Act falls
The Treasury has pleaded with the Supreme Court to overturn a decision of the Court of Appeal quashing the Finance Act, 2023, arguing that the government will lose Sh214 billion if the judgment is upheld.

▪ Treasury overdraft fees rise 87pc on higher interest rates
Overdraft charges for the government increased by 87 percent in the year to June 2024, as cash flow challenges left Treasury tapping more emergency loans from the Central Bank of Kenya amid rising interest rates.

▪ IFC lends KCB Rwanda subsidiary Sh7bn
KCB Group subsidiary in Rwanda has received a $60 million (Sh7.73 billion) loan from development finance institutions including the International Finance Corporation (IFC) for on-lending to small and medium-sized enterprises.

▪ Centum in fresh deal to sell Sh1bn stake in Sidian Bank
Centum Investment Company's stake in Sidian Bank is set to fall below 10 percent on a fresh Sh1.03 billion deal in which it plans to sell 50 percent stake in the holding company through which it owns the small lender.

Courtesy: Business Daily

10/09/2024

News Highlights

▪ T-bill rates decline for six consecutive weeks
Interest rates on Treasury bills have fallen for six consecutive weeks as investors soften their demand for enhanced returns at the weekly auctions, amid an improved economic environment including low inflation.

▪ Top banks cut provisions despite higher loan defaults
Kenya's largest banks reduced their allowance or buffers for expected credit losses, despite the level of loan defaults in the country hitting a near two-decade high of 16.3 percent as at June 2024.

▪ China stops short of Africa debt relief, pledges more cash
China stopped short of providing the debt relief sought by many African countries this week, but pledged 360 billion yuan ($50.7 billion) over three years in credit lines and investments.

▪ Listed firms to share financial calendar in new CMA rules
Nairobi Securities Exchange (NSE)-listed firms will now be required to submit to the regulator a forward-looking calendar of corporate announcements, including release of financial statements and dividend payment dates.

▪ Suppliers now seek Sh21bn for delayed State payments
Contractors and suppliers to the government have started slapping agencies, holding huge pending bills with penalties, which is likely to present a new headache for the government.

Courtesy: Business Daily