correction, current issued shares are 420 million. After the offer the total will be 1070 million shares. About the dilution effect, thats not our problem furthermore the stake they are selling to us is 30%.

Their 11% stake in Equity Bank, Makes up 26% of their assets now this is subject to alot of market risk I.e 1H 2011 the Equity share is down by over 10%...do the math and you will see how much the balance sheet has taken a knock aulready....also their insurance arm has been posting underwriting losses year in and out leaving them at the mercy of the stock market for income...in 2010 90% of their profits of Sh 2.7 bln came from the NSE...the Asset managememt firm only contributed Sh 230 Mln...Of all the insurance firms I have looked at this is the least diversified and one thing for sure their profits will swing year in year out depending how the NSE performs....my 2 cents...check my blog for details...

@Mwanahisa thanks for the correction....i will update my blog accordingly...uhmm there is nothing cheap then

Thanks man for this, so its the investment arm floating the shares....centum and olympia capital will be its peers huh?

So noted. BTW, you have done some very good work on this company. I am generally in agreement with your sentiments on the company given the variable nature of the company's profits over the year with its over reliance on investment income (and especially on Fair Value Gains on Financial Assets through Profit & Loss which is the worst of the lot in terms of its unreliability).

That figure is the downfall of many companies that fail to manage it. Its not even a cash flow.. You cant feel or use those gains for anything.


Investment income should include:
1. Rental income
2. Dividend income
3. Interest income
4. Share of profits in private equity and associates in which they have a share
5. Gains on asset disposals (should not be frequent)

For sustainable income, investment companies should try eliminate:
1. Net fair value gains thru profit & loss (look at britak)
2. Revaluations of assets
3. Frequent asset disposals(unless its their business)..

By observing the importance of each factor to the investment company you are looking at you will make the right decisions when choosing..

@selah, same here.

@mwanahisa, please send me the annual reports to email address 2mwekezaji@gmail.com

Whoa! This i why i love wazua. Learning everyday. When i grow up i want to be like, mwanahisa, guru, the deal.

@guru267, I am in complete agreement with your observations regarding British American's quality of earnings. Obviously comparing BA with Jubilee which I know you love (and in which I also have considerable stakes), the choice between the two is a no brainer.

However, as @aguytrying has noted, this could very well be a compelling smash and grab job. And it could very well turn out to be a good investment in the medium term after the IPO speculators/profiteers shakeout (I intend to be one of them).

As you know, the market does not always follow pure fundamentals. See where CFCIH is trading with its very weak earnings numbers.

Im also looking to get in and out but with limited funds because their is substantial risk in this one..