Can you believe this report came from Sterling. The name sterling stands for ~ excellent, first-rate, exceptional, matchless, incomparable, worthy, genuine. True to their word, even bloomberg took their sterling research.

Mumias Sugar Co., Kenya’s largest producer of the sweetener, was rated “buy” in new coverage at Sterling Investment Bank, which cited plans by the company to diversify its revenue base.

Mumias’s share-price estimate was set at 18.6 shillings ($0.23) per share, Nairobi-based analysts Onesmus Nzioka and Mourine Katila said in a note to clients dated today. The stock was trading at 15 shillings at 1:35 p.m. today (Aug 3, 2010) in the Kenyan capital.

“The case for investing in Mumias is largely backed by revenue diversification from a sole product-sugar, into co- generation of electricity and ethanol,” the note said. In addition to providing a new revenue stream, power production will also lower output costs, it said.

Mumias currently supplies 26 megawatts of electricity to Kenya Power and Lighting Co., the state-owned monopoly power distributor, at 4.68 shillings per kilowatt hour, the analysts said. The company earns about 1.1 billion shillings annually from electricity sales, or 7.5 percent of total revenue, they said.

Mumias also has the capacity to convert its molasses, a by- product of sugar production, into 65,000 liters (17,171 gallons) per day of ethanol.

“This could go a long way in countering the ever-rising petroleum prices,” Sterling said.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

By Eric Ombok - Aug 3, 2010 3:04 PM GMT+0300

http://www.bloomberg.com...ew-revenue-streams.html

Surely, when will Kenya have serious reporters. When will CMA declare Sterling Disinvestment Bank bankrupt of research resources and true researchers. Woe onto those who follow their advice.

Young, I thought you died. A peter young died recently and he appeared to have been you with all the wisdom and age. where did SIB get the 1.1 billion figure from. mumias only made abt 350m from selling power to kplc. such margins of error are not acceptable. neither do more than 50% targeted price difference with actual price ie, current 11 shillings versus 18 shillings projected for mumias.

Investment banks and brokers are CRAP!!!!

did any of you guys notice how the muumias buy recommendation in August conveniently came out as the price was rallying to 15bob....

They did the exact thing with Kenya re... Just before results the stock rallied to 14.5bob and immediately the investment banks said it was worth 21 bob... 7 months later we're at 11.7 bob

On the flip side they rated KCB as a sell citing that it would trade below the 20bob range for about two years after the rights issue... 3 months later we're at 22.75

My advice is NEVER to listen to your broker's advice....

@Paul Kukubo, if you are who I think you are, welcome on board!!! Great to know that movers and shakers are in the game!!! Tandaaa!!!!