link?

This is not a good thing at all.The way they refused to extend the contract of the previous MD after performing quite exceptionally begs the question of how competent Kenya-Re's board is.

I think Kenya-Re requires fresh blood that would make it competitive and less reliant on government protection.

Its even worrying that the current MD has not done as much as the previous MD in growing the business although we are yet to see 2010FY report.

I think its a bullish signal...he has acted for a year...why appoint him now? ama the Board has nothing to offer? we will pelt them with rotten eggs at the AGM...Lol.

I beg to differ on KQ.. but won't. like simba..it's on peak now.. 33 remains feasible.
But then.. i could be wrong. ..albeit selling bunch got at 34.

Your sentiments on KQ are right. However, my point is that just because a share remains at a certain price range for a while, this does not preclude it from shooting up all of a sudden. A lot of folks wait for the signal that the price is beginning to go up before they are convinced it is a good deal.

I don't think that KQ's poor share performance prior to late 2004 is an appropriate comparison to the situation faced by KenRe today. For one, the period from 1995 to the year 2002 was generally a lost decade (or as near to one as it can be) for the entire stock market. There were very few bright spots for the whole market in those years. Most companies during those years traded at less than book value and with dividend yields of above 10%. For example , in 2001 Barclays Bank had an EPS of Kshs 16 with a DPS of Kshs 14, yet at 31.12.2001, the price was Kshs 72.50. (I obtained these figures from the NSE HandBook circa 2005). In that sense KQ was not unique.

Of course KQ also suffered from the risk generally associated with airlines. This perception was pretty much confirmed in the minds of many, with the January 2000 crash of its Airbus off the coast of Abidjan (Outtaraland). It was therefore not surprising that, KQ just like today traded at a lower PE than the blue chips.

On the other hand Kenya Re today is almost alone (if we ignore agriculturals) in trading below its Net Book Value. Note that this is a company with no loans - Indeed it had more than Kshs 3 billion in cash or near cash on its books as at 30.06.2010. It has been rated at AA and BB+ by International Rating Agencies for its claims paying ability in Kshs and US$ respectively. This is a better rating than its private sector rival, East Africa Re which just increased its PAT for 2010 by more than 50%.

With the above facts, it is therefore hard to justify a trading price which is just about half its projected 2010 NAV and PE of less than 4.

Indeed I postulate that KNRE does not actually need to do anything extraordinary for the share to at least go up by 20%. This is because investors hardly expect anything out of it. Hence, should the Mgt and B.o.D just be seen to be waking up from their slumber, I would not be surprised by a more than disproportionate rise in the share price.

[quote=the deal] Whats bad about Kenya Re?

1. Heavy Government influence, the Government of Kenya (GOK) owns about 60% of total number of issued shares thus the Company is exposed to the red tape and inefficiencies associated with government owned entities

2. Well run and efficient reinsurers like Swiss Re are fast encroaching on Kenya Re's turf.

3. Kenya Re is yet to appoint its Chief Executive Officer since the former C.E.O's term expired, this is not good for the Company because every Company needs leadership to drive it forward

4. The mandatory Concessions which where recently extended expires in 2015, it remains to be seen if the Company grow its business without this mandatory Concessions.

Kenya Re as an Investment Case.

1. Net Average Value Ksh 15
2. EPS Ksh 2.20
3. Trailing PE Ksh 4.52

4. Kenya Re has a 25% stake in reinsurer PTA Africa
5. As of 31-12-2009 they had Ksh 2 Billion as an investment in quoted shares, considering the NSE closed as as the best performing market( Up 36% in 2010) alone i expect significant upside on that investment and that will reflect on their books.
6. They have been on an expansion off late entering new markets in West Africa
7. They have a top class property portfolio

Entire article here http://contrarianinvesti...nce-is-undervalued.html[/quote]
Thanks man. Will look at. I've never realy had interest in what they do, but now its sparked up my curiosity.

@Mwanahisa, I like your analysis. The problem is
not that people do not know that Kenya Re is undervalued.

It is just that they are not convinced that it will ever get to its real value. That said, I will be on the lookout for signs of a breakout.

.....this share is headed to Eveready levels, today at 8.60 per share .... am scared. What exactly is wrong in this counter....

Its an insurance firm, generally this year will be tough for insurance firms on the NSE.