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Kenya airways Right Issue
Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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VituVingiSana wrote:StatMeister wrote:
Over next 5 years, they borrow 180b. At 10% interest, sounds like interest payments work out at 18b. I dont see how doubling operations will generate additional operating profits of even 10b. KQ keeps making more money from derivatives than from operations.
1) The rates are much lower than 10% of USD loans. Probably closer to 5% coz borrowed from US EXIM Bank. 2) The 180bn is not borrowed in one go but gradually as planes are delivered. Therefore the additional payments are made after more planes are in service. This is an even bigger problem since KQ has to either hedge the USD or take impairments even now and then. Then, KQ annuals will shift focus from operations to performance of fuel and forex hedges ... A bad day fishing is better than a good day at work
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Rank: Member Joined: 2/22/2010 Posts: 510 Location: De egg
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Thanks to my broker I ejected @18 bob but not without bruises . Not looking back till I see sub 10 . But will have to think hard . Peace be with you
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Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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I sometimes wonder, yesterday this stock closed at 18.05, and we all know it will be doing sub-14 by week-end. So, exactly who was buying today at 17.95, and exactly what are they getting today from the stock that they will miss if they wait till Friday? A bad day fishing is better than a good day at work
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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StatMeister wrote:VituVingiSana wrote:StatMeister wrote:
Over next 5 years, they borrow 180b. At 10% interest, sounds like interest payments work out at 18b. I dont see how doubling operations will generate additional operating profits of even 10b. KQ keeps making more money from derivatives than from operations.
1) The rates are much lower than 10% of USD loans. Probably closer to 5% coz borrowed from US EXIM Bank. 2) The 180bn is not borrowed in one go but gradually as planes are delivered. Therefore the additional payments are made after more planes are in service. This is an even bigger problem since KQ has to either hedge the USD or take impairments even now and then. Then, KQ annuals will shift focus from operations to performance of fuel and forex hedges ... Aren't the majority of KQ's collections in USD? Their tickets are also in USD equivalent. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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maligumu wrote:Thanks to my broker I ejected @18 bob but not without bruises . Not looking back till I see sub 10 . But will have to think hard . @Maligumu are you a trader or an investor. Trading too much will turn you into a "buy high" "sell low" investor. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Sure wrote:KQ 16:5 rights will burn your fingures
If you can, sell your secondary rights of KQ at NSE and forfeit paying 14 bob for every 5 shares you have. KQ will start making positive returns from the rights issue partially in 2014 and the Dreamline delivery will have to work like clock work for KQ to give good returns for those who will have been holding the baby from 2012 to 2014.
Wait for KQ at 10 bob or less after the rights issue and just when elections fever will be high as we end the year and before March 2013 or June 2013 if there will be a rerun.
Those who have ears, let them hear.
I foresee a political assassination this year.
They have eyes, but do not see, they have ears but do not hear. @sure what do you consider a fair valuation of KQ? @the deal was buying at 46 an year ago. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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KQ ina wenyewe... Air France - KLM Royal Dutch Airlines and GOK. Wanyiku (Wazuaiku) doesn't have 20B and is selling instead of buying? Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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About 80 per cent of Kenya Airways Sh20.7billion share rights issue has been secured, KQ management saidThis is reinforced by the fact that local and foreign institutions own 77.14% of KQ shares while local individuals own 22.14%. Foreign individuals own a mere 0.71%. There you have it, only wanjiku is yet to decide whether to exercise their rights
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Cde Monomotapa wrote:Interesting. Shrewd way of securing a client for the longrun ;-) Indeed shrewd ... and wanjiku should derive some comfort from the underwriting
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Rank: User Joined: 11/10/2010 Posts: 550 Location: Junction
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StatMeister wrote:I sometimes wonder, yesterday this stock closed at 18.05, and we all know it will be doing sub-14 by week-end.
So, exactly who was buying today at 17.95, and exactly what are they getting today from the stock that they will miss if they wait till Friday? They are called speculators. They do not use fundamentals before investing, they never do due diligence nor do they have concrete explanations of why they put their money anywhere. That is why they are far better off investing in land, if they do not manage to be swindled in the process. But come to think of it, if they do not participate in the NSE, who would the investors leave holding monkeys? By inference, the man is all that Mr Phantom is not: an untrustworthy radical, divisive, too many enemies, a dictator, and a persistent liar...Gaitho dialogues.
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Rank: User Joined: 11/10/2010 Posts: 550 Location: Junction
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[quote=sparkly] @guru you will give us ulcers, but there is more: http://www.bbc.co.uk/news/business-16787761
http://travel.usatoday.c...ralia-collapse/629912/1[/quote] Airline business is not for the faint hearted. Spain's fourth-largest airline Spanair has collapsed, leaving more than 20,000 passengers stranded across Europe and Africa. The Barcelona-based firm stopped operating on Friday and more than 200 flights were abruptly cancelled. The Spanish government is taking legal action and said Spanair could be fined 9m euros (£7.6m; $11.9m) over the collapse. In 2010, Spanair reported an operating loss of 115m euros. The collapse comes after Qatar Airways stopped takeover talks, ending the prospect of further financing, and also reflects weak demand for air travel in Spain. In 2008 a Spanair plane was involved in Spain's worst aviation disaster in 25 years, when it crashed on takeoff as it tried to leave Madrid's Barajas airport, killing 154 people. The aircraft's wing flaps were incorrectly positioned and a warning system failed to alert the pilots. By inference, the man is all that Mr Phantom is not: an untrustworthy radical, divisive, too many enemies, a dictator, and a persistent liar...Gaitho dialogues.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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If indeed its true kq rights are underwritten,this thing is a buy for me since there will be very few speculators. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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mlennyma wrote:If indeed its true kq rights are underwritten,this thing is a buy for me since there will be very few speculators. Ulcer centro. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 9/9/2010 Posts: 546 Location: Garissa
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sparkly wrote:[quote=Sure][b]KQ 16:5 rights will burn your fingures @sure what do you consider a fair valuation of KQ? @the deal was buying at 46 an year ago.
Fair value, book value, or market value? I would be comfortable with KQ if it trades at 9 shillings to become a dividend share if it keeps up with the 1/= DPS at least for the next 3 yrs so that we can have a clear picture of the implementation of the strategy they are putting in place. Those billions they are talking about might be too much for Naikuni to handle. Naikuni has been a director at EAPCC and we know what has been going on there. I have very little faith in him currently. Wisdom to detect when share prices hit rock bottom.
When interest on bonds keep going up, you know the bear run is on high street. When interest on bonds start leveling, the bear has met the bull and they have hit rock bottom. When the interest rates on bonds start coming down, the bull has overpowered the bear and you better be riding the bull.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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mwekez@ji wrote:Cde Monomotapa wrote:Interesting. Shrewd way of securing a client for the longrun ;-) Indeed shrewd ... and wanjiku should derive some comfort from the underwriting True but this only means KCB might not hold as much cash for the period as I'd thought  too many Qualified Investors up in hurr!
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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sparkly wrote:StatMeister wrote:VituVingiSana wrote:StatMeister wrote:
Over next 5 years, they borrow 180b. At 10% interest, sounds like interest payments work out at 18b. I dont see how doubling operations will generate additional operating profits of even 10b. KQ keeps making more money from derivatives than from operations.
1) The rates are much lower than 10% of USD loans. Probably closer to 5% coz borrowed from US EXIM Bank. 2) The 180bn is not borrowed in one go but gradually as planes are delivered. Therefore the additional payments are made after more planes are in service. This is an even bigger problem since KQ has to either hedge the USD or take impairments even now and then. Then, KQ annuals will shift focus from operations to performance of fuel and forex hedges ... Aren't the majority of KQ's collections in USD? Their tickets are also in USD equivalent. Even local flights are priced in USD - converted to KES for payments - there is little currency risk. Most of KQ's interest costs, lease costs, fuel costs, etc are in USD Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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It is trading at 15.10 today.
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Rank: Member Joined: 3/14/2012 Posts: 577 Location: Nairobi Kenya
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I have always wanted to make money from this counter so badly, for what reason i don't know.I guess that's vision 2014 for me!!And am yet to dump my stock....OUCH!!! Before I die - i will touch the sky!!
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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LOL... I might as well buy my Rights from the market ;-) They might cost me less than 14/- Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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