Nonetheless..

LOAR!

I trust that this is hypothetical. HF's cost of funds will not rise as dramatically as you may expect. You will recall that they raised about 7B in a corporate bond offering sometime back, most of which was taken up at a fixed rate.

They will also now be operating current accounts which over time will bring down part of the expected increase in the cost of funds.

@selah, running adverts to attract deposits at 9% when you are lending at close to 20% is very different from what you had intimated in your earlier post specifically regarding HF. Incidentally the race for deposits is not unique to HF. CFC Stanbic are doing the same. I & M were also offering double digit interest rates for deposits as recently as last month.

I appreciate that net interest rate margins are thinning but this will not necessarily lead to an "operating loss".

HF were particularly lucky (or had excellent foresight) when they issued their bond as they locked in reasonably low rates. As you may be aware they were planning to issue a 25 year (you may correct me on the duration) bond, but the current cost is too prohibitive. It is for this reason that they are now considering raising the funds from abroad.

Selah. I would support such a strategy. So far HF has put borrowed funds to good use growing profits by one of the highest rates amongst Kenyan banks over the last 3 years. The appetite for home loans is clearly there - just not at the 20%+ ruling currently. So if they can borrow internationally and onlend at reasonable rates, that will be great. I just hope they will be able to hedge against the associated currency fluctuation risks.

Demand of 800,000 shares at 22.00.

Heavy supply of 1,100,000 shares at 22.50.

What will happend