@Aguy - I like TPS. Bought some at 36. I should pick some more up. Solid management. Nice P/B. If they were to sell it as a going concern, they could easily find buyers. Lots of re-development potential for Nairobi Serena.

My buy price is also very high coz I started a long time ago. I want to take advantage of the depressed price at normal strength, eps is 3-4. Right now eps is bad due to poor results but I expect this to change. As you said good management the industry is a problem but I'm betting it will get better.

TPS failed to expand in Nairobi e.g. Westlands where Sankara/Kempinski dominate & Upper Hill with Crowne Plaza. Many people do not want to stay in or near 'town' nor hold events at Serena when more convenient options are available in Upper Hill and Westlands.

A Serena Westlands and Serena Upper Hill (or Hurlingham) would have helped consolidate their grip.

Another overlooked segment is a "Serena Lite" which would cater for those who want cheaper but quality accommodation. Look at Fairview with its full service main hotel and (limited service) City Lodge.

And despite the obvious demand it has no Airport Hotel like Panari, Eka, Ole Sereni, etc.

Such a strategy helps Serena spread its Back Office, Reservations & Fixed Cost expenses across more rooms. Plus these properties can act as training schools for the premium brands [or the other way round].

That said, I like that Serena has kept expenses/debt in check when times were tough. A judicious expansion strategy helps with the slow but sure approach when quality needs to be maintained.

KQ grew too fast. Took on too much debt. Disaster.

The graph tilting slowly towards equities attractiveness. ...


The weighted average yield on Kenya's 91-day Treasury
bills fell to 9.316 percent at Thursday's auction from 9.938 percent last week, the
central bank said.
The bank received bids worth a total of 11 billion shillings ($108.16 million). It had
offered 4 billion shillings worth and accepted 8.3 billion shillings of the offers. ($1 =
101.7000 Kenyan shillings) (Reporting by Drazen Jorgic, editing by Larry King)

The greatest tragedy for NSE investor, the real morale killer are sentiments.

I support the bill! Finally capital will flow to those who need it most, thus spur rapid economic growth!

Not good. As distasteful as high interest rates are, this is the wrong way to rectify the situation. No one can strong arm the market...lawmakers are about to find out. KE economic environment is definitely not on the mend with such shenanigans flying around.

Credit will become cheaper for a few. The rest will have to see loan sharks.

If 10-year T-Bonds (guaranteed by GoK) yield 14.5% then why would a bank lend to @VVS [who can die, has no taxing power, can't legally print money, can be sued] at 15% with all the risk it entails?

GoK needs to:
1. Cut spending. Especially on frivolous items and projects. PPPs work better for economic projects.
2. Borrow less. Don't crowd out the private sector. Why are farmers competing with GoK? [A farmer who borrows to grow tea is competing with GoK funding Galana]
3. Get out of the business of business.
4. Facilitate business by easing registration, licensing and access to resources.
5. Reduce and standardize taxes. Make Tax Law clear and not subject to arbitrary rules/enforcement by KRA.

No, the small banks will not collapse but the incentive to lend will be diminished. Or banks will jack up fees instead of higher interest rates. So in addition to the KBRR + 5% they will charge heavy commitment fees, transaction charges, correspondence charges, etc.

YES, the banks need to reduce their margins. Kabisa. They also need mechanisms and processes that are equitable to them & customers to deal with defaulters. A defaulter can stymie a bank in court for 5 years or more. Then there are fake Title Deeds and corruption in the courts.

Most of us end up paying (I think) 2-3 % more to cover for defaulters.