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Housing Finance: HFCK a diamond in the rough
Rank: Chief Joined: 1/3/2007 Posts: 18,366 Location: Nairobi
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guru267 wrote:VituVingiSana wrote:guru267 wrote:Its amazing to see the negativity towards housing finance as an investment more so from "seasoned" investors...
Just because you love CFC (@the deal) or you love DTB (@VVS)does not mean all objectivity is out the window..
Historical P/E for HF is around 15...
Historical P/E for the whole banking sector is around 12....
Historical P/B for HF is around 2...
Historical P/B of the whole sector is also around 2...
In what world is it impossible to return to those ratios at least for the whole sector??
Given that the new land laws are not retrospective and the so called NPL ratios are cooked at board meetings I still think HF is the best bet in the banking sector...
And not to forget that DIVIDEND YIELD is on fire in this current market!!!! " Given that the new land laws are not retrospective" Well, if you say so then it must be so... @VVS my source is directly from Caroline Kariuki who is CEO of The Mortgage Company after I had asked her how they would factor in the risk... Where is your source from about the retrospective laws... I'm always open to correction! Perhaps Caroline knows better than the folks at Coulson Harney. I do not. http://www.coulsonharney...ot-of-the-new-land-laws
4.3. Charges over private land - mandatory provisions and retrospective effect
There are now new provisions on regulating charges over land. These provisions are mandatory and have retrospective effect, which means that they will apply to charges created before the new laws came into force.Retrospective effect on ongoing sales by chargees - where a secured lender had initiated "any steps to foreclose a charge" before the enactment of the new laws, the borrower may apply to court for an injunction to stop the continuation of any such step. If such an injunction is issued, the lender may commence fresh proceedings under the new laws in order to exercise their statutory power of sale. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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VituVingiSana wrote:Perhaps Caroline knows better than the folks at Coulson Harney. I do not. http://www.coulsonharney...ot-of-the-new-land-laws
4.3. Charges over private land - mandatory provisions and retrospective effect
There are now new provisions on regulating charges over land. These provisions are mandatory and have retrospective effect, which means that they will apply to charges created before the new laws came into force.Retrospective effect on ongoing sales by chargees - where a secured lender had initiated "any steps to foreclose a charge" before the enactment of the new laws, the borrower may apply to court for an injunction to stop the continuation of any such step. If such an injunction is issued, the lender may commence fresh proceedings under the new laws in order to exercise their statutory power of sale. @VVS perhaps you didn't read the document too well  HF looks pretty safe to me after what I read below..  4.3. Charges over private land - mandatory provisions and retrospective effect
Enacting laws with a retrospective effect is unusual, particularly where the retrospective effect is likely to cause detriment. In our view, retrospective legislation that leads to any form of arbitrary expropriation of a right or interest in land may be challenged for being unconstitutional(c) Spousal consent required for charge of land; charge may be void if no consent obtained
As discussed above, spousal consent will be required in order to validly charge any land held by a person who is married. If spousal consent is not obtained or if the borrower gives misleading information on the lenders inquiries regarding spousal consent, the charge will be deemed void at the option of the spouse or spouses whose consent was not obtained. This provision does not have retrospective effect.
Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/3/2007 Posts: 18,366 Location: Nairobi
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@guru - I read it. It has to be challenged in court all the way to the Constitutional Court. Takes some time. And if they rule against the banks? There is a chance. You never know with Kenyan courts. They are too busy fighting for perks than work. I never referred to the the provision being retrospective as regards spousal consent. Nevertheless, there will be challenges from wives, concubines, mistresses and their kids. Now go to: Retrospective effect on ongoing sales by chargees - where a secured lender had initiated "any steps to foreclose a charge" before the enactment of the new laws, the borrower may apply to court for an injunction to stop the continuation of any such step. If such an injunction is issued, the lender may commence fresh proceedings under the new laws in order to exercise their statutory power of sale. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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VituVingiSana wrote:@guru - I read it. It has to be challenged in court all the way to the Constitutional Court. Takes some time. And if they rule against the banks? There is a chance. You never know with Kenyan courts. They are too busy fighting for perks than work.
I never referred to the the provision being retrospective as regards spousal consent. Nevertheless, there will be challenges from wives, concubines, mistresses and their kids.
Now go to: Retrospective effect on ongoing sales by chargees - where a secured lender had initiated "any steps to foreclose a charge" before the enactment of the new laws, the borrower may apply to court for an injunction to stop the continuation of any such step. If such an injunction is issued, the lender may commence fresh proceedings under the new laws in order to exercise their statutory power of sale. That part I've put in bold is as murky as it gets for the lender. If the lender happens to get a number of dishonest borrowers, those court battles will not be funny on the bottomline... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 9/15/2006 Posts: 3,907
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@VVS, this bond of HFCK is x3 the current market capitalization of the firm, interesting... However, noting their coverage ratio has declined to 14.2% which remains below the 50.0% sector average, the money is needed. VituVingiSana wrote:A huge boost for HFCK but at what price? http://www.reuters.com/a...d-idUSL5N0IM0EG20131101
Kenyan mortgage financier Housing Finance has secured approval to issue a 20 billion shillings ($234.33 million) corporate bond, the market regulator said on Friday.
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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guru267 wrote:Its amazing to see the negativity towards housing finance as an investment more so from "seasoned" investors...
Just because you love CFC (@the deal) or you love DTB (@VVS)does not mean all objectivity is out the window..
Given that the new land laws are not retrospective and the so called NPL ratios are cooked at board meetings I still think HF is the best bet in the banking sector...
And not to forget that DIVIDEND YIELD is on fire in this current market!!!! @guru267, you seem to have a liking for real estate investments with Home Afrika then Housing finance...Mr. Market is negative on real estate there is some element of risk in defaults and overvaluation
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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All businesses have their flaws and their strengths.
I reckon HF is my next big thing timeline April 2014. However, I hope it stays down till then and I can accumulate.
The new land laws, in my view is positive and not detrimental to the business and it's also a small part.
I think only time will tell. My chips are solidly placed on HF.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Horton wrote:... The new land laws, in my view is positive and not detrimental to the business ... How are the new Land Laws positive for the business?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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VituVingiSana wrote:
I never referred to the the provision being retrospective as regards spousal consent. Nevertheless, there will be challenges from wives, concubines, mistresses and their kids.
I thought Kenya had a system for recognizing who qualifies as a spouse and who doesn't.?! VituVingiSana wrote:
Now go to: Retrospective effect on ongoing sales by chargees - where a secured lender had initiated "any steps to foreclose a charge" before the enactment of the new laws, the borrower may apply to court for an injunction to stop the continuation of any such step. If such an injunction is issued, the lender may commence fresh proceedings under the new laws in order to exercise their statutory power of sale.
I don't think judges just give out injunctions willy nilly... There would have to be an analysis to see if the charge over the property qualifies under the new law and whether it is retrospective... If it meets the above criteria then and only then should an injunction be granted! Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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mwekez@ji wrote:Horton wrote:... The new land laws, in my view is positive and not detrimental to the business ... How are the new Land Laws positive for the business? if implemented properly, these will cut out lots of red tape, no doubt the spousal approval and landlord rights might impact negatively on banks and landlords respectively....
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