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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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Ericsson wrote:VituVingiSana wrote:jmbada wrote:I agree. CMA is toothless in this. The firms are simply making losses, not commtting any offenses. Even requesting monthly updates is irrelevant and legally unenforceable. CMA is not on the executive board and has no right to even make such requests. The "action" on C&G is amusing when Safcom has -27bn Working Capital (1H 2018-19). Not that Safcom has anything to answer for! If a firm can manage on negative WC, so be it. Firms like C&G could convert ST loans into LT loans but that means little given a debt is still a debt. A firm may choose, given the economic circumstances or business line, to take on ST debt to finance inventory. Every sector is different, every firm is different. What seems to have spooked CMA is Nakumatt but not firms are Nakumatt. IMHO, a major cause of distress for firms that were doing reasonably well is over-expansion using expensive debt. In KE, debt is very expensive. There could be other causes eg changes in taxation, tech, relevance, etc. @vvs This negative working capital of ksh.27bn you keep talking about I don't see it in the financial statements.I am seeing a positive figure Current Assets - Current Liabilities in the 1H results but do note that it is irrelevant given the nature of their business. Prepaid sales/airtime are considered liabilities but these get used up. Even Bonga Points. You don’t get a refund. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: New-farer Joined: 5/19/2014 Posts: 68 Location: Migori
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VituVingiSana wrote:Ericsson wrote:VituVingiSana wrote:jmbada wrote:I agree. CMA is toothless in this. The firms are simply making losses, not commtting any offenses. Even requesting monthly updates is irrelevant and legally unenforceable. CMA is not on the executive board and has no right to even make such requests. The "action" on C&G is amusing when Safcom has -27bn Working Capital (1H 2018-19). Not that Safcom has anything to answer for! If a firm can manage on negative WC, so be it. Firms like C&G could convert ST loans into LT loans but that means little given a debt is still a debt. A firm may choose, given the economic circumstances or business line, to take on ST debt to finance inventory. Every sector is different, every firm is different. What seems to have spooked CMA is Nakumatt but not firms are Nakumatt. IMHO, a major cause of distress for firms that were doing reasonably well is over-expansion using expensive debt. In KE, debt is very expensive. There could be other causes eg changes in taxation, tech, relevance, etc. @vvs This negative working capital of ksh.27bn you keep talking about I don't see it in the financial statements.I am seeing a positive figure Current Assets - Current Liabilities in the 1H results but do note that it is irrelevant given the nature of their business. Prepaid sales/airtime are considered liabilities but these get used up. Even Bonga Points. You don’t get a refund. True. Any idea what makes up the 113B non-current assets. Learning to sit on my hands
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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ombaalbt wrote:VituVingiSana wrote:Ericsson wrote:VituVingiSana wrote:jmbada wrote:I agree. CMA is toothless in this. The firms are simply making losses, not commtting any offenses. Even requesting monthly updates is irrelevant and legally unenforceable. CMA is not on the executive board and has no right to even make such requests. The "action" on C&G is amusing when Safcom has -27bn Working Capital (1H 2018-19). Not that Safcom has anything to answer for! If a firm can manage on negative WC, so be it. Firms like C&G could convert ST loans into LT loans but that means little given a debt is still a debt. A firm may choose, given the economic circumstances or business line, to take on ST debt to finance inventory. Every sector is different, every firm is different. What seems to have spooked CMA is Nakumatt but not firms are Nakumatt. IMHO, a major cause of distress for firms that were doing reasonably well is over-expansion using expensive debt. In KE, debt is very expensive. There could be other causes eg changes in taxation, tech, relevance, etc. @vvs This negative working capital of ksh.27bn you keep talking about I don't see it in the financial statements.I am seeing a positive figure Current Assets - Current Liabilities in the 1H results but do note that it is irrelevant given the nature of their business. Prepaid sales/airtime are considered liabilities but these get used up. Even Bonga Points. You don’t get a refund. True. Any idea what makes up the 113B non-current assets. Retained earnings+share capital Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 1/1/2011 Posts: 396
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Ericsson wrote:ombaalbt wrote:VituVingiSana wrote:Ericsson wrote:VituVingiSana wrote:jmbada wrote:I agree. CMA is toothless in this. The firms are simply making losses, not commtting any offenses. Even requesting monthly updates is irrelevant and legally unenforceable. CMA is not on the executive board and has no right to even make such requests. The "action" on C&G is amusing when Safcom has -27bn Working Capital (1H 2018-19). Not that Safcom has anything to answer for! If a firm can manage on negative WC, so be it. Firms like C&G could convert ST loans into LT loans but that means little given a debt is still a debt. A firm may choose, given the economic circumstances or business line, to take on ST debt to finance inventory. Every sector is different, every firm is different. What seems to have spooked CMA is Nakumatt but not firms are Nakumatt. IMHO, a major cause of distress for firms that were doing reasonably well is over-expansion using expensive debt. In KE, debt is very expensive. There could be other causes eg changes in taxation, tech, relevance, etc. @vvs This negative working capital of ksh.27bn you keep talking about I don't see it in the financial statements.I am seeing a positive figure Current Assets - Current Liabilities in the 1H results but do note that it is irrelevant given the nature of their business. Prepaid sales/airtime are considered liabilities but these get used up. Even Bonga Points. You don’t get a refund. True. Any idea what makes up the 113B non-current assets. Retained earnings+share capital Positive Working Capital is NOT a continued listing requirement. This is a meaningless metric...and an affected performance monitoring mechanism. CMA does not run listed companies. Only the executive directors do so. Even the monthly or quarterly update requirement is completely toothless.
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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CMA needs to look at firm where there is fraud or symptoms of fraud. It's not easy but it should liaise with the auditors, with the OK of the firms for legal reasons, to investigate matters of concern. CMA should also monitor directors and their insider dealings. Unga has 2 directors who are also a directors of NIC. Is all the business between the 2 legit? Or all deals between Seaboard and Unga at arms length? Is Unga's CEO also working for Seaboard? [Yes, according to the Annual Report, he was also paid by Seaboard but CMA allowed him to sit on the board that proposed the 40/- offer] Cracking down on "Negative Working Capital" without understanding the sector or business makes little business sense. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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VituVingiSana wrote:CMA needs to look at firm where there is fraud or symptoms of fraud.
It's not easy but it should liaise with the auditors, with the OK of the firms for legal reasons, to investigate matters of concern.
CMA should also monitor directors and their insider dealings.
Unga has 2 directors who are also a directors of NIC. Is all the business between the 2 legit?
Or all deals between Seaboard and Unga at arms length?
Is Unga's CEO also working for Seaboard? [Yes, according to the Annual Report, he was also paid by Seaboard but CMA allowed him to sit on the board that proposed the 40/- offer]
Cracking down on "Negative Working Capital" without understanding the sector or business makes little business sense. Atleast they understand KQ
KQ ABP 4.26
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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Tips for preparing your portfolio for economic slowdown and bear run; --Own stocks with good balance sheets and low debts --Consider short duration and bonds --Have at least 10% cash in your portfolio. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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Ericsson wrote:Tips for preparing your portfolio for economic slowdown and bear run;
--Own stocks with good balance sheets and low debts
--Consider short duration and bonds
--Have at least 10% cash in your portfolio.
--In the event you have personal debt, use all excess cash to pay down the personal debt
KQ ABP 4.26
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Rank: Elder Joined: 12/7/2012 Posts: 11,935
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obiero wrote:Ericsson wrote:Tips for preparing your portfolio for economic slowdown and bear run;
--Own stocks with good balance sheets and low debts
--Consider short duration and bonds
--Have at least 10% cash in your portfolio.
--In the event you have personal debt, use all excess cash to pay down the personal debt Own defensive/resistance stocks e.g. BBK. Will not experience to much swings including profitability. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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Angelica _ann wrote:obiero wrote:Ericsson wrote:Tips for preparing your portfolio for economic slowdown and bear run;
--Own stocks with good balance sheets and low debts
--Consider short duration and bonds
--Have at least 10% cash in your portfolio.
--In the event you have personal debt, use all excess cash to pay down the personal debt Own defensive/resistance stocks e.g. BBK. Will not experience to much swings including profitability. Since 2011, BBK has not grown any shareholder income substantially. Hio 🤷🏾♂️KES 0.8 dividend, afadhali niuze mitumba toi for a better annual return 
KQ ABP 4.26
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