Muhuthia, Bedbug and others
i would like to hear your word on Equity Bank

We were discussing the same with Wamaitu and we kind of came to one conclusion 'Buy' Our Opinion was based on the June 08 financial Report which we expect to be quite impressive. Equity made a kill in Loan processing for those investors whom they financed to buy safaricom. Each applicant was charged 800 bob for Porcessing/insurance fee. they were a receiving bank and that comes with some commision in it.Again they acted as a stocks agent which means their high number of clients for whom they opened CDS account gives them a chance to rake in 50% or more on the Brokerage fee of 2.1% for 'buy' or 'sell'. Their end of June Earnings must be very good.

What do you guys think of Access Kenya, Eabl, NIC, ARM and KCB?

Wakihia aka Tim,

It could be true that Equity might post impressive returns but that is history. It is likely that the current market prices have already factored this piece of information and you are therefore not likely to find much appreciation there. However, what is of great interest to me is whether this is part of exceptional income and whether that earning stream can be perpetuated in future. So what happens if there are no IPOS to underwrite and fund in future? will that mean a dip in future earnings ? What implication is that likely to have on share prices in future? But again, i have been wrong in the past.

As for ARM, those who bought earlier may be enjoying themselves to death. One thing you ought to know is that the market for Cement has been firm in the years past. However, at least 3 more competitors are set to join the market. That is Tororo Cement, Mombasa Cement (Could still be part of Tororo but am not sure), a chinese and another Egyptian firm.

With reduced duty on Clinker, i foresee low cost clinker producers flooding this market in not so distant future. My 2 cents.

I share the same opinion with Dudu, definately Equity is expected to make a good return, and investors became interested quite early. I recon this is already reflected in the price, the only concern is if the bank will be able to perpetuate this non core revenue streams. To be honest the bank is enjoying unprecedented growth in customer base but is lagging behind if you look at the average revenue per customers compared to BBK .

Equity to me is a buy.We expect impressive results especially from Safaricom IPO gains. Rumours say out of the 50B the treasury was getting, 7B came via Equity,i.e 14%. If its so, comissions and loan intrests then will boast their results.
ACCESS it has potential. The industry is still very young. Roumors again says they have plans of introducing wireless internet in houses.
KCB, with the rights issue over, we expect the cash will boost its expansion program to Rwanda and within the other countries.

Guys many thanks
Given the way Speculators behave at NSE, i think this stock is a good one for them.i do agree with both of you that the 'higher earnings' might be a one off. its also unlikely that the bank may not post such earnings in the future but we can expect the unexpected with Dr. Mwangi.

BBK.
i think i will keep off this one for a while now.The recent expansion into areas that they closed shop sometimes back does not seem to bring in any meaningful income by industry standards, the Interest payments on their bond will further cut back on their profits. whats ur take?

Access Kenya?

EABL?

What does the future hold for NBK?

I agree with Wakihia on BBK I would not touch it with a barge pole, here they are behaving like copy cats. One has to be one of the people to be with it in places like Kawagware, Kangemi etc in these places micro finance is the in thing BBK cannot compete with Equity in Micro finance.

Access Kenya has already started the Residential broad band, I expect this will be a key revenue stream (other things being even), for me this is a sure fire.

EABL I do not like Diageo.

NBK to me is a wait and see case as its survuval is to a large extent dependent on the goodwill of the govt.