Tuesday, May 09, 2006

the markekt on 8th May 2005

The upward movement of the market yesterday was beyond my wildest imagination. The Nse share index climbed more than 40 points aided by price increases in many counters. My favourite Express Kenya moved 1.25 shs. up. I expect this stock to continue on its upward mobility buoyed by their intention to issue bonus shares at a meetinng scheduled for July. In addition, this business is now effectively on a turn around after a rights issue and divestment from the loss making travel division. There was a justified Kshs. 5 jump for KCB which reported very good results for the first quarter. Mumias also appears to be on que, recording a rise in share price a to new high of 64. Their plans to move into production of the electricity for sale to the national grid and that of ethanol should provide a new impetus for revenue growth even with the uncertainaties surrounding the importation of duty free sugar from the COMESA region. However, the upward mobility on the part of Athi RiverMining appers to me to be exxergerated largely because thier earnings growth does not appear to be sustainable in the short to medium term. However, i was disapointed with the slow upward mobility of uchumi supermarkets where i have a sizable stake. I expected to see the price go up by at least 50% this week not because of the fundamentals, but as a result of retail investors who have been scrumbling to buy into uchumi and sell for short term capital growth. This did not materialise yesterday. Should the stock fail to hit Kshs. 19 by Friday 12th May, then i shall liquidate my stake in readiness to buy Kengen on its first day of secondary trading, 17th May 2006. If the goverment finaly delivers on paying off billions of loans owed by parastatals to NBK, then the upward movement of that stock to a new high of 41 would be more than jsutified. In addition, there has been talk of goverment divestiture from the bank. this would be additional good news. However, my worst disapontment is associated with premier mortgage provider, HFCK. Having hit a new high of 32, i expect the stock to lose at least shs. 4 today after news that the expected takeover by a consortium led by trancentury has aborted. The talks are said to have been called off on Friday last week after the Commonwealth Development Corporation demanded a renegotiation of price for their 24% stake in the firm. the approval was granted by CBK on April 20, 2006.