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Kenya airways Right Issue
Rank: Member Joined: 3/11/2009 Posts: 22
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@qw The brokers have the book. The full IM is also at: http://rightsissue.kenya...e_IM_Final_29032012.pdf
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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236 pages and they can’t give a financial forecast!!! Damn!!! How are we supposed to analyse the profitability of KQ as they apply the rights money and borrowed fund!!!
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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VituVingiSana wrote:"...according to Clark, who says he’s sticking with a no-hedging strategy rather than risking a losing bet.
“You think you’re going to win, but in the long term you always lose,” Clark said yesterday at the Gulf carrier’s head office near Dubai International Airport. “When we enter into derivatives, betting whatever it may be with counterparties who actually control the price of fuel in the first place, you have to ask yourself, ‘Is that smart?’” http://www.bloomberg.com...il-in-fuel-squeeze.html
Well, compare KQ vs Emirates! KQ has made net losses since they started hedging. These hedges are sold by financial institutions that in turn buy/sell the same hedges... It's the fox guarding the hen-house. Citi will get a good deal. KQ's NAV is much higher than 14/-. Even after the Rights, the NAV will be above 14/- [and a lot of it in cash]. Furthermore, Citibank will INSIST in being the main bank for KQ's Rights Issue thus earning fees, commissions & arbitrage income. Citi will also get a DISCOUNT on the Rights Issue. Yes, suckers, Citi will pay less than 14/-. Suckers, they have not fully underwritten the rights issue. They have only underwritten 30,000,000 shares worth KES 420,000,000 and they are getting KES 47,645,075 in underwriting fees. (from section 6.5 of IM). That’s basically a discount of 11.34% (12.40 per share). Indeed, they’ve paid less than 14 bob. Smart guyz.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Incase of an undersubscription, applications from KLM and the GoK will be scaled back to result in them holding 26 per cent and 23 per cent of the enlarged share capital following the Rights Issue respectively. (from section 6.4 of IM). So if there is an undersubscription, KQ will be getting less than the anticipated KES10B from these 2 parties. Clearly, KQ has a tough time in raising the required money in this rights issue.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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kiongozi2012 wrote:Now IFC has joined in KQ Rights Issue with a plan to take up rights worth $25 million (SH2 billion) that's ten per cent of the Rights. when people like IFC come in, you begin to realize that this KQ thing is serious. Plus news is that they are forking out $80million in debt to finance aircraft deposit payments. i am certainly taking up my rights. I think IFC is just positioning themselves as lender of KQ by taking the 10% rights shares. Those shares will earn them a position in top 10 shareholders list. Not bad, IFC and KQ need each other in project mawingu.
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Rank: Member Joined: 3/11/2009 Posts: 22
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@mwekez@ji, I agree with you. They have not even given projected figures for the year ended March 2012. I think the results will be really bad. About the future, they should have done some projections at least for the next two or three years. By then, they will have received all 20 Embraers ordered, three B777s and at least one Dreamliner. They also say they will be flying to all major African cities by 2013. Why couldn't they make projections of what these developments will mean in terms of revenues and profit?
A second concern of mine is that the CEO does not own a single share in the company. What does he know about the share that we dont?
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Rank: Member Joined: 7/22/2008 Posts: 851 Location: nairobi
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I have not seen the rights trading on the market. Or am i looking at the wrong place?
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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murenj wrote:I have not seen the rights trading on the market. Or am i looking at the wrong place? Considering its agreed that the share is worth less than the quoted Kshs14.. and rights can only trade at premium.. who'd want to buy? ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: User Joined: 1/24/2012 Posts: 1,675 Location: In Da Hood
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Woi . mimi nina nunua tu !
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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You can be able to sell a monkey provided you dont show pple its face. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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mlennyma wrote:You can be able to sell a monkey provided you dont show pple its face.  Especially when u claim it has genius genes that will kick in in about 3 years.  ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Rank: User Joined: 1/24/2012 Posts: 1,675 Location: In Da Hood
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aiigh . now this is a monkey ? no this is a very good stock ad foreign interest is high . you think foreigners just buy things lik its a fis market ?
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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What we are saying is simply that an entry point lower than14 bob will present itself as we go on. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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1,94Billion Shares.. Thus Historical Eps is Kshs1.82, and a Div per share of Kshs 0.35 At a share price of 14.00..this translates to a trailing p/e of 7.69 and not 1.83 as reported in press ..and a dividend yield of 2.5 and NOT 10.75% ..Going forward, profit warning projected fall of 25% on earnings thus EPS expected for 2011-12 is Kshs1.36 and thus at price of 14.00, p/e shoots up to 10.29..from 7.69 buy a stock whose year-on-year earnings growth is about twice the p/e ...the only justification of buying KQ is that it grows it's earnings for next year by AT LEAST 20.6%... which is unlikely. If newspapers..business news.. wazua.. factored the new shares in the financial data they are publishing... potential investors will think differently..fundamentally ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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QW, nani alikuambia foreigners can't be left holding monkeys? Aren't they the same guys who were buying at 60 not long ago? That did not turn out to be a monkey, but a gorilla deep in the Congo forest! GOD BLESS YOUR LIFE
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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youcan'tstopusnow wrote:QW, nani alikuambia foreigners can't be left holding monkeys? Aren't they the same guys who were buying at 60 not long ago? That did not turn out to be a monkey, but a gorilla deep in the Congo forest! si hata Tanzanians n Ugandans are foreign investors? (no pun intended) Anyway, seems strategy here is "buy" coz another is buying.. the art of "following the big money"..like guys did when meralli played Uchumi.. the strategy has its drawbacks..as proven by uchumi.. though if ur analysis for KQ is its a "buy" then the big money confirms ur opinion.. A guy insulted me about 4 years ago..for telling him not to buy Kq..at 113..it touched 126 within the month..and then came down all the way to 17...he still has the stock..having bought in at 119..and foreigners were buying.. ..somewhere in wazua is a thread on the same.. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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QW25091985 wrote:aiigh . now this is a monkey ? no this is a very good stock ad foreign interest is high . you think foreigners just buy things lik its a fis market ? they were busy buying access kenya at 35 sometime back
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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ProverB wrote:1,94Billion Shares..
Thus Historical Eps is Kshs1.82, and a Div per share of Kshs 0.35
At a share price of 14.00..this translates to a trailing p/e of 7.69 and not 1.83 as reported in press
..and a dividend yield of 2.5 and NOT 10.75%
..Going forward, profit warning projected fall of 25% on earnings thus EPS expected for 2011-12 is Kshs1.36 and thus at price of 14.00, p/e shoots up to 10.29..from 7.69
buy a stock whose year-on-year earnings growth is about twice the p/e ...the only justification of buying KQ is that it grows it's earnings for next year by AT LEAST 20.6%... which is unlikely.
If newspapers..business news.. wazua.. factored the new shares in the financial data they are publishing... potential investors will think differently..fundamentally Something is not adding up in your figures. How can you assume that the KQ would have generated the same revenue with so much additional shares/capital and borrowings. How can you say that the company cannot grow by double digit yet its operations are doubling.
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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mwekez@ji wrote:
Something is not adding up in your figures.
How can you assume that the KQ would have generated the same revenue with so much additional shares/capital and borrowings.
How can you say that the company cannot grow by double digit yet its operations are doubling.
7 years in a row...kq has recorded increased revenues..while recording decline in operating margins (except for 2010-11)...meaning for every shilling in revenue..less and less remains as profits.. Operations doubling means more passengers vs more aggressive expenditure in getting those more passengers... it costs more per passenger and per unit of cargo on transit than it did years ago.. No doubt operations will double...but so will costs... shareholders are pumping new cash into KQ..this ain't KQ's money...ksh20billion plus..the issue is when shareholders will receive a return on that cash... definately not next year.. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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