http://www.businessdaily.../-/138yxb9/-/index.html

Based on the above article the current price looks relatively cheap.

Centum's share price is increasing, but it is still lower than its net asset value.

Anyone with a short term interest could buy it now and sell in early August. This is when the hullaballoo associated with financial results’ announcement increases demand among Kenyans for whatever reason (as happened with Kenya-Re, Crown-Berger and the others).

Based on the blogpost below, I think it is also a worthy buy in the long term.
http://afrikainvestor.bl...investment-company.html

18.76/= as at Half Year ended September 2011

How does it look cheap? These are just prospects that could turnout unprofitable!

To digress a bit, what is the net asset value for TCL.

I would doubt it is a misadventure. Centum now has three business lines, which are Private equity, Quoted equity and Real Estate & Infrastructure. The real estate one (where the land purchase/home construction business lies)is actually is the most profitable of these. With gross returns of 23.0% in the half-year to 2012, compared to 2.1% in unquoted investments and a negative 6.1% in stocks, it’s really helping them cushion their losses in the stock market.

However, your feeling is right. Out of these three segments, Real Estate & Infrastructure is the only one which is financed by borrowing, to a tune of what seems to me as almost KES 2 Billion by the end of FY 2011 (see Segment Information in their half-year to 2012 financials)

By investing in this field, Centum also stands a chance to save on tax through real estate investment trusts (REITS). Finance Act 2011 amendments seek to have income that has been generated by REITS and distributed to unit holders exempt from income tax (presently 30%).


In all, I think it is a wise move.



Read more about incentives on REITS:
http://www.the-star.co.k...to-spur-housing-market-

mwekez@ji, I thought 144,008,422 are yet to be converted. If you include these, guru's, figure is just about right (27.45) I would imagine that these would come on board sooner rather than later...

The conversion price per Underlying Share is:

KES 42.40 in 2012
KES 44.80 in 2013
KES 47.20 in 2014
KES 49.60 in 2015

Will these bond holders really convert if the share prices remain low/continues to decline, plus NAV per share being significantly lower than conversion price, plus considering the dilution that comes with such shares

mwekez@ji, I agree (with your later post) that it will be irrational for the convertible bond investor to exercise his option to convert given the current share price.

I also agree that the numerator in the calculation in the quoted post should be the SFP’s total equity, which is KES 11,472,467,000.
For the denominator, however, the 6,912,194 shares issued shouldn’t be added directly to those outstanding at the end of FY 2010 (which would yield 273,950,284); rather they should be weighted, like they have done in the notes when calculating basic EPS. This gives a total weighted average number of ordinary shares outstanding during FY 2011 of 269,342,155.
There’s not a very big difference though. Net asset value per share is KES 26.06 without the bond (and KES 42.59 with the bond as equity).

For a keener analysis of TCL, see:
http://afrikainvestor.bl...-limited-period-to.html

considering a 5yr low of 8.50/- in 2009 and the dark clouds hovering above it currently. A tumble down is imminent....but then again there is irrational Mr market. Whats your opinion of the current value of 12.40/- ?