When will uchumi shares resume trading at the NSE

The government, through the minister of trade had promised to re-open some of Uchumi's stores this week. However, the PS came out yesterday saying the action would be delayed pending consent from the board of PTA bank and the recruitmnent of new managers. This will take some weeks.

This is good news to invesors as it means they will ultimately be able to recoup their cash. I have received queries from some investors as to when they will be able to trade their shares on the market again. This will take time.................actually years. There are several conditionsythat have to be fulfiled before Uchumi can be allowed to trade again.

The business has to get out of insolvency:
This is a tall order which means the company has to trade back to ptofits to the tune of after tax profits exceeding Kshs. 1.3bn. This is the deficit in their books as per the last financial statements. Alternatively, shareholders will have to inject additional capital to close this gap.
The secured creditors (PTA & KCB banks) will have to be paid .
The Business will have to firmly come back to the black to the extent that the CMA is satisfied that the company cannot slide back to insolvency.

Considering the performance of Uchumi before they got in the red and also of their competitors, all being well, its my opinion that at least three years are required before uchumi can be allowed to trade again. This is also on condition that on repopening, kenyans agree to shop at Uchumi.

Equity Bank's refusal to take in fresh capital a major disapointment

Save for the effect of an aggressive advertisement campeign even the just concluded Kengen IPO would not have raised as much public iterest and investor excitement as Equity Bank's IPO. Kengen's IPO attracted 240,000 investors (individuals and corporates). Equity bank is home to more than 170,000 account holders most of them jua kali operatives and peasant farmers. All these would have willingly raised the approximate Kshs. 5000 required to purchase minimum shares at the IPO (using kengen's listing price)

It therefore came as a major surprise when then bank announced that they will not be seeking new capital when they list shortly. This means investors will not benefit fromthe rapid price appreciation as happened with Kengen. The employees and existing shareholders of the bank are likely to be major beneficiaries of the expected price jump.

Why is equity bank not ready to take in more capital?
the bank has a somewhat interesting capital structure. No individual shareholder commands more than 20% of the shareholding. The two largest shareholders are IFC with 16% and Britak Investment (read British American Insurance) with 12%. This gives them a combined total of 28%. Were they to take in more capital, this would mean dilution f the anchor shreholders stake ,which appears to be pricisely what the bank is avoiding.

This is a smar way of rewarding the minority shareholders without diluting the stake of anchor shareholders. More family run businesses in Kenya should emulate them.