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Weak Outlook for Kenya's Industrial Stocks
the deal
#1 Posted : Tuesday, May 03, 2011 11:11:10 AM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
While most Kenyan Banks listed at the Nairobi Stock Exchange have been reporting record profits the same cant be said of their counterparts in the industrial sector. Most of the industrial stocks have either announced reduced profits or sunk into loss making territory i.e Express Kenya Ltd which recently reported an Earnings per share loss of 0.15.

Here are the reasons on why i'm less bullish on the industrials stocks?

1. The Weak Kenyan Shilling-the Kenyan Shilling has plunged against major currencies such as the the US$, Euro and the Sterling pound. In fact the Kenyan Shilling has lost about 10% to the green buck in 2011 alone. The weak shilling will push up costs for the industrials making their operations more unbearable as most of their input raw materials are imported, a tonne of wheat at $360 at the exchange rate of KSh 74 is not the same as at an exchange rate of Ksh84 do the math.

2. Super Inflation-year on year inflation surged to 12% in April mainly due to the escalating fuel prices following the revolts in the Middle East and North Africa( MENA) countries. Inflation will cut spending by consumers as their budgets become eroded by the high cost of living, if you cant sell anything you are out of business.

3. Raging Commodity prices-commodity prices have surged globally mainly due to the surge in the Chinese demand which has emerged as a new superpower, high commodity prices will increase input costs for the industrials i.e coal is a key input for cement companies.

Entire article here http://contrarianinvesti...enya-industrial_02.html

Comments on how to make the blog better are welcom...PS.
VituVingiSana
#2 Posted : Tuesday, May 03, 2011 11:25:14 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,221
Location: Nairobi
I would start with something simple to improve the blog...

A little research coz Express Kenya is NOT an Industrial Firm... It does not manufacture anything [to the best of my knowledge] but is primarily in the logistics business i.e. warehousing, storage & transport...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
the deal
#3 Posted : Tuesday, May 03, 2011 11:36:49 AM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
VituVingiSana wrote:
I would start with something simple to improve the blog...

A little research coz Express Kenya is NOT an Industrial Firm... It does not manufacture anything [to the best of my knowledge] but is primarily in the logistics business i.e. warehousing, storage & transport...

Laughing out loudly Laughing out loudly Laughing out loudly Asante sana @VVS
Cde Monomotapa
#4 Posted : Tuesday, May 03, 2011 11:43:14 AM
Rank: Chief


Joined: 1/13/2011
Posts: 5,964
Fuel Cost pass-through, Forex adj. cost & Inflation adj. cost. Fish & find out.
the deal
#5 Posted : Tuesday, May 03, 2011 11:52:45 AM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Cde Monomotapa wrote:
Fuel Cost pass-through, Forex adj. cost & Inflation adj. cost. Fish & find out.

yep KPLC is good at it...its a monoply anyway...others cant i.e Unga....it will push consumers to cheaper alternatives...there is the Chinese factor.
mkonomtupu
#6 Posted : Tuesday, May 03, 2011 11:59:30 AM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,001
Location: River Road
must give @deal credit he is posting very good posts much better than the casual facebook status updates now common on wazua
Muthawamunene
#7 Posted : Tuesday, May 03, 2011 12:37:18 PM
Rank: Member


Joined: 1/3/2011
Posts: 264
Location: Nairobi
mkonomtupu wrote:
must give @deal credit he is posting very good posts much better than the casual facebook status updates now common on wazua

I greatly apologize for that one. kumbe u cant delete those stupid posts.
the deal
#8 Posted : Tuesday, May 03, 2011 12:37:46 PM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
mkonomtupu wrote:
must give @deal credit he is posting very good posts much better than the casual facebook status updates now common on wazua

Applause Applause. Lets keep da Wazua spirit burning.
the deal
#9 Posted : Wednesday, May 04, 2011 10:58:49 AM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
industrials are taking a beating in today's session...i expect this to be the norm as we go forward.
StatMeister
#10 Posted : Thursday, May 05, 2011 4:44:33 PM
Rank: Veteran


Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
Sameer EPS = 0.21, proposed final dividend = 0

Earnings down 63% and they want to keep all of it. I suppose they expect a tough year ahead...
A bad day fishing is better than a good day at work
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