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Athi River Mining - HY Ksh. 355.8 million loss
hisah
#11 Posted : Saturday, August 01, 2015 5:49:31 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Gatheuzi wrote:
Gatheuzi wrote:
Gatheuzi wrote:
Watch out for highly geared companies. If debt is a high percentage of equity expect rate hikes to possibly erode vitually all profits.

Uchumi falls in this category. ARM needs to move fast to deal with the short term borrowings. Trancentary already planning a rights issue to deal with debts. Home Afrika may post a bigger loss as they keep digging themselves in funny arrangements. KQ - its obvious where they are headed. Mumias - already deep in debt and cant pay.


Rate hike of 300bps confirms my earlier worries. I expect 75% of firms above to give profit warnings this year.


Not surprised at all.

Post #118

Yes. And those with fx loans will take in even more losses. I think 90% in this category will announce losses. Your 75% estimate is quite optimistic. The USD strength and hawkish CBK will grind these firms gains to powder!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
tonicasert
#12 Posted : Sunday, August 02, 2015 11:08:54 AM
Rank: Member

Joined: 3/10/2008
Posts: 301
Location: Abu Dhabi
VituVingiSana wrote:
In most African countries, borrowing in USD (or even borrowing in LCY at very high rates) & selling in LCY is a disaster. As a country (Kenya) or region (EAC) or continent (Africa), we should dollars our economies. We need Fiscal discipline that is imposed on us and perhaps a Monetary Policy that we have little control over.

Some may look at it as neocolonialism but I see it as 'discipline' that is imposed on us OR we might just end up like Venezuela or Argentina (under the Peso).

Kenya issued a USD Eurobond. The KES got an artificial boost and when the euphoria ran out, the bill has come due. A 6% USD bond is now 16% when re-calculated in LCY.

I need help researching which country had the cash-in cash-out policy. My poor googling skills aren't helping.

I can't recall which country did it but they had moved to a cash accounting system for a little while i.e. books were balanced DAILY. If the Treasury had $10mn then it wrote cheques for $10mn. Everyone queued up for payment which also meant increased scrutiny for payments.

Therefore, Things of Desire would line up with a genuine supplier e.g. KenolKobil to be paid. All the payments would be listed and can be challenged by those in the queue.

Shady firms or deals would be shunted aside pending verification or sent to the back of the queue. Cash in, cash out. What happened was that inflation dropped like a rock as there was no printing of money. The economy did suffer a slow-down but I looked at it positively that there was genuine growth not inflationary filed growth.


Almost sounds like what Egypt is doing now to clamp down on black mkt dollar sales... For a company to buy USD, there's a queue which could be upto a month, and there's a restriction on depositing USD to 10K per day, max 50K per month (Previously, one would buy form black mkt, depo and remit the USD). But black mkts are the result of a super-restricted market.
What we have in Kenya is a structural issue, where the inflows (that are supposed to repay the loans) are not enough.. tourism inflows have dwindled, and the import bill is huge, esp with the current infrastructural projects that will gobble up USD's.
VituVingiSana
#13 Posted : Monday, August 03, 2015 11:31:39 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,342
Location: Nairobi
tonicasert wrote:
VituVingiSana wrote:
In most African countries, borrowing in USD (or even borrowing in LCY at very high rates) & selling in LCY is a disaster. As a country (Kenya) or region (EAC) or continent (Africa), we should dollars our economies. We need Fiscal discipline that is imposed on us and perhaps a Monetary Policy that we have little control over.

Some may look at it as neocolonialism but I see it as 'discipline' that is imposed on us OR we might just end up like Venezuela or Argentina (under the Peso).

Kenya issued a USD Eurobond. The KES got an artificial boost and when the euphoria ran out, the bill has come due. A 6% USD bond is now 16% when re-calculated in LCY.

I need help researching which country had the cash-in cash-out policy. My poor googling skills aren't helping.

I can't recall which country did it but they had moved to a cash accounting system for a little while i.e. books were balanced DAILY. If the Treasury had $10mn then it wrote cheques for $10mn. Everyone queued up for payment which also meant increased scrutiny for payments.

Therefore, Things of Desire would line up with a genuine supplier e.g. KenolKobil to be paid. All the payments would be listed and can be challenged by those in the queue.

Shady firms or deals would be shunted aside pending verification or sent to the back of the queue. Cash in, cash out. What happened was that inflation dropped like a rock as there was no printing of money. The economy did suffer a slow-down but I looked at it positively that there was genuine growth not inflationary filed growth.


Almost sounds like what Egypt is doing now to clamp down on black mkt dollar sales... For a company to buy USD, there's a queue which could be upto a month, and there's a restriction on depositing USD to 10K per day, max 50K per month (Previously, one would buy form black mkt, depo and remit the USD). But black mkts are the result of a super-restricted market.
What we have in Kenya is a structural issue, where the inflows (that are supposed to repay the loans) are not enough.. tourism inflows have dwindled, and the import bill is huge, esp with the current infrastructural projects that will gobble up USD's.


I am not talking about USD/forex but spending in general by GoK including & mostly KES. If Treasury only spent/disbursed what KRA collected then inflation would drop.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Pesa Nane
#14 Posted : Tuesday, October 06, 2015 2:29:30 PM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c


Panic selling (fund raising)??
Consolidating (Cash parking)??
Smart money (Accumulating / entry)??
Pesa Nane plans to be shilingi when he grows up.
Aguytrying
#15 Posted : Tuesday, October 06, 2015 3:14:48 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
I'm wondering. Is it time to start buying ARM? At 30.00 I won't be asking questions
The investor's chief problem - and even his worst enemy - is likely to be himself
Aguytrying
#16 Posted : Tuesday, October 06, 2015 3:19:18 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
.
The investor's chief problem - and even his worst enemy - is likely to be himself
popat
#17 Posted : Tuesday, October 06, 2015 4:03:18 PM
Rank: Member

Joined: 12/2/2009
Posts: 299
Location: kenya
The cement industry has become too competitive in the recent years with the margins lowering every other day.This has not been helped by the entry of so many other players in the industry.The future looks gleam for ARM.Unless the management renovates its strategy to recapture the market share turnaround may be not come easy.They have however leveraged aggressively with expansion strategy in the works.
Gatheuzi
#18 Posted : Tuesday, October 06, 2015 6:04:45 PM
Rank: Veteran

Joined: 8/16/2009
Posts: 994
AKS thinks the price will go up 4 fold Shame on you


Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
muganda
#19 Posted : Tuesday, October 06, 2015 6:15:29 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Gatheuzi wrote:
AKS thinks the price will go up 4 fold Shame on you



Well, ARM now growing circa 10-15% (overlooking current HY loss) and it's priced at P/E of 12. He must be yearning for its historical premium: who's going to pay it though?

Then again, isn't he on their retainer?
VituVingiSana
#20 Posted : Tuesday, October 06, 2015 7:26:51 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,342
Location: Nairobi
Gatheuzi wrote:
AKS thinks the price will go up 4 fold Shame on you



Pay for play. KQ, Safaricom, ARM, KCB, you name it.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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