GoldenConsultKE

Now introducing our Tax consultancy Services. 2015 new year new and better services.

The NSSF Bill 2013 was passed by Parliament yesterday and is only awaiting the President’s assent. The 6% contribution is not a deduction from your salary rather a contribution to secure you a comfortable life style once you are retired.

What do you think about the NSSF Bill 2013?

Over the week (28th - 1st November), the NSE 20 was up 1.10% w/w (20.73% YTD) to close at 4989.97 points. Turnover fell by 36.19% w/w to KES 2.84Bn (USD 33.30m) buoyed by increased trading particularly on the large cap counters. Centum was the week’s top gainer edging up 16.96% to close the week at KES 32.75. Eveready however shed 8.77% to close as the week’s top loser at KES 2.60.

In 3Q13 results, Equity Banked posted a 6.75% growth in pre-tax earnings to KES 12.6B helped by a 29% reduction in interest expense from KES 5.4B in Q3 2012 to KES 3.8B in 2013. Interest income rose marginally by 4% y/y to KES 23.6B due to the decline in lending rates which reversed the high interest regime experienced last year. However net loans and advances grew by 20.74% from KES 131.3B to KES 158.6B. Non-funded income rose by 12% from KES 9.4Bn to KES 10.6Bn mainly driven by the agency banking transactions and commissions on diaspora remittances where the bank currently enjoys 16.1% in market share. As of September, USD 131.5M from the diaspora was channeled through the bank.
The bank currently has 8,612 active agents. Group’s balance sheet grew by 15.26% to KES 267.7Bn, while total shareholder funds stood at KES 46.9Bn from KES 39.2Bn a year ago.

The total operating income grew by 14% y/y to KES 30.3B, but on q/q it dipped by 0.10% (KES 10.02B vs. KES 10.03B). Total costs increased by 19% to KES 17.8B due to heavy Capex being undertaken by the bank to improve its operating infrastructure. As a result, cost to income (CIR) ratio deteriorated to 50.9% from 50.2% a year ago. The book quality worsened by 50bps to 5.5% driven by 156.5% growth in non-performing loans. The increase in NPLs is largely attributed to the current guidelines for loan provisions, where financial institutions are supposed to hold a loan provided for a period of 6 months in their provision. The highest NPL provisions by sectors are 7.01% and 6.82% for Small - Medium Enterprises and Micro Enterprises respectively.

CIC Insurance has announced plans to open a real estate unit aimed at capitalizing on joint ventures with international investors as the firm gears up to diversify its earnings margins.
The announcement comes at a time when majority of Insurance and investment firms are racing to cut a share of the booming property sector driven by the rising middle class eyeing for home ownership.
CIC Insurance has already acquired parcels of land around Nairobi for property development purposes, with expected demand likely to come from Kenyans in the diaspora. In our opinion, the formation of the real estate subsidiary will help shield the firm from overreliance on life and general insurance premiums, further giving the insurer a competitive advantage against peers already reaping from the sector to grow their income margins.

This week we focus primarily on the Nairobi Stock Exchange, we will be giving you indicators based on our research here. Feel free to weigh the information and use it to your benefit. .

Oil marketer, KenolKobil has successfully raised KES 1.7bn through a commercial paper placement in a move that will see the firm effectively finance its operational costs which have been surging on the back of rising sales.
In our opinion, the funds will help improve the firm’s working capital management position by freeing up more cash requisite in financing the day to day operations. In addition, with the firm having come back to the profitability zone, we forecast improved performance on the counter helped by increasing investor confidence triggered by fairly strong financial position attained by the firm.

Equity research, the economics behind it.

Analyse this EQUITY research is meant to benefit both providers and recipients. It ought to help investors to allocate money more profitably. And the banks that give their...

Unity is key for our nation. Praying for the families affected by the attack. God protect Us.

Local Banks Beat Foreign Rivals in Profits Contest.

High risk appetite and ability to connect with the bottom segment of the loans market has seen local banks topple their foreign rivals from the profitability table. The three top tier foreign banks in the Kenyan banking scene, Barclays, standard chartered and Citi bank have been pushed to the lowest edge now controlling 25% of the sector earnings compared to 40% dominance enjoyed by local tier banks, Kenya Commercial Bank, Equity bank and Cooperative bank In the six months to June this year, the three local banks earned 25bn of the industry’s 62bn earnings compared to 15bn earned by their foreign peers. In our opinion, the local banking sector remains an active investment haven given the better understanding of the market dynamics and the aggressive pursuit of their business models, which have seen most of the local banks attract significant market share.

The IMF warns that growth in emerging economies is being revised downwards. Read more below: Perhaps we should reconsider some of the huge cashflow we are giving to China for their cheaper goods and services if our economy is to heal.

What is your take?

IMF warns G20 of slowing growth drive The International Monetary Fund warned the Group of 20 on Wednesday that emerging economies were slowing more than expected and under pressure from US plans to slow its stimulus.

Financial Planning: Factors to consider when developing your personal Financial plan.

Financial Planning 101 Introduction | Financial Management | Personal Finance Money Management How do you make your life better? get more control? protect your family? Create a personal financial plan. Start here! We all want to know how we are going, ...