Jan Schalkwijk of Africa Capital Group traveled to Nairobi recently to meet with the management teams of several large Kenyan companies. The following is his take on three of the Nairobi Securities Exchange’s most prominent banks.
Read More...May 16, 2013 By 4 Comments
April 4, 2013 By 4 Comments
Kenya’s Safaricom Is Set to Dial Up Profits After Long Price War
Jan Schalkwijk, CFA, portfolio manager at Africa Capital Group, recently visited the Nairobi-headquarters of Safaricom, Kenya’s largest mobile phone company, and had the opportunity to sit down with CFO John Tombleson. Here, he briefs us on the meeting.
Read More...March 28, 2013 By Leave a Comment
Afrinvestor’s Journal: Witnessing the Kenyan Election
Jan Schalkwijk is a Portfolio Manager with Africa Capital Group, an asset management firm that specializes in African stocks. The following is an account of his recent trip to Kenya and Burundi.
As the plane began its descent into Nairobi the evening of March 5th, I struck up a conversation with the KLM flight attendant. I always enjoy the opportunity to speak a little Dutch, which is not a daily occurrence for me these days.
As part of the usual small talk, I asked her where in Nairobi the flight crew was staying. She replied that KLM security had advised them to stay at the airport this time in light of security concerns surrounding the elections that had been held the day prior.
It was then that I mentally connected the news articles I had been reading about the Kenyan elections with the reality of being there, at ground zero of what could either be a repeat of the 2007 election violence or something more hopeful: a watershed moment for Kenya — a peaceful transition of power.
Read More...March 12, 2013 By 10 Comments
Kenya’s Dividend Kings: Two Stocks for Income Investors
It’s tough to beat a company that pays out a regular dividend.
They generate income for shareholders. They typically boast sharp management teams. And, historically, their shares have outperformed their non-dividend-paying counterparts.
The Nairobi Securities Exchange is chock full of dividend stocks. Almost all companies listed on the market presently pay a dividend.
But not all dividend stocks are created equal. Some don’t yield much in relation to their price. Others pay out so much of their earnings that it hampers their future growth. And some disappoint shareholders with frequent dividend cuts.
So, which Kenyan stocks offer the most substantial, reliable, and growing income stream?
Let’s take a closer look.
Read More...February 28, 2013 By 7 Comments
Will Kenya’s Election Be Peaceful?
The upcoming Kenyan general election isn’t far from the thoughts of many Africa investors these days. It’s easy to understand why. Violence following the 2007 poll left hundreds dead, thousands homeless, and temporarily derailed the region’s economic development.
The World Bank estimates that Kenya’s economic growth will reach 5.0% this year if the elections come off peacefully. But if post-election tumult erupts once more, that rate is forecast to brake to 3.0%.
Given the stakes for the Kenyan people, I approached a number of market watchers with boots on the ground and asked them what they expected to transpire.
Read More...February 5, 2013 By 4 Comments
Is KCB Bank Group Kenya’s Choicest Stock?
When I asked my friend Kamanda Morara of Ashanti Research for his best Kenyan stock pick for 2013 in mid-December, I had no idea that his choice would bear fruit so quickly.
His tip, KCB Bank Group (KNCB:KN), was trading at a price of KES27.50 at that time. This gave it a dividend yield of 6.7% and a trailing P/E ratio of just 6.5.
Someone must have been eavesdropping on our conversation.
The stock now boasts a price of KES33.50 — a gain of nearly 22% in less than two months.
So, I checked back in with Kamanda last week to congratulate him and to ask whether he felt KCB still had room to run.
Read More...January 15, 2013 By 10 Comments
The 10 Best Kenyan Stocks Over the Past Five Years
Five years ago, Kenyans were in the midst of one of the darkest months in their nation’s history. A deeply flawed presidential election resulted in protests that rapidly descended into a spate of ethnic violence.
Unsurprisingly, the Nairobi Stock Exchange took a dive, losing $591 million on 2008′s first day of trading.
At the time, it was difficult to see how the country would recover. But Kenyan businesses picked up the pieces and carried on, producing goods and services, creating jobs, and investing in a better future.
As Kenyans warily enter into another election season (polls are scheduled for March), it can be difficult to see past the daily political headlines. They can cause even the most savvy investor to overreact – selling in a dip and buying on a bounce.
So, I think it’s helpful to take a closer look at how resilient Kenyan businesses have been in order to help us keep a long-term view.
Read More...November 9, 2012 By 14 Comments
3 Reasons the Kenyan Economy Is Set to Boom
In this guest post, Robert Rayford of Dealmarket.com argues that Kenya merits a long look from global investors.
Throughout Africa there are a number of potential economic giants waiting to awaken from their collective slumbers and lay down a marker both on the continental and global stages. Due to the well-documented troubles encountered by the continent, be it famine, corruption, or something else, the potential for growth there is among the highest and most attractive in the entire world.
Kenya is one such country where all the stars appear to be aligning at the same time, so to speak, and the East African nation could be set to be the big African economic success story of the next decade.
What is happening, or has happened, in Kenya to leave it on the cusp of an economic boom period?
Read More...August 9, 2012 By 8 Comments
6 Kenyan CEOs Who Bet Big On Their Own Stock
In a recent blog post, African stock market pundit, Coldtusker, argued that Kenya Airways’ dismal share returns can be at least partially explained by the fact that its CEO owns zero shares of the company.
His reasoning is that a boss with no skin in the game has little incentive to manage a company in shareholders’ best interests.
To test this theory, we measure the stock performance of five Kenyan companies that are managed by heavily vested CEOs to see if they beat the market over time.
Read More...August 2, 2012 By 9 Comments
Ranking Kenya’s Most Efficient Banks
Last week I posted a list of Africa’s 100 largest frontier stocks. You didn’t have to examine the list very closely to see that banks were disproportionately represented. In fact, of the 100 companies, 35 are banks.
So, as Africa investors, we’d do well to develop some skills in analyzing bank stocks.
Today, we’ll start with a basic measure of bank profitability – the efficiency ratio.
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