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The East African : Jul 5th 2015
52 JULY 4-10,2015 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 4,812.57 0.05% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,641.08 -5.85% USE All Share Index Uganda 1,958.00 -1.31% RSE All Share Index Rwanda 144.52 6.54% JSE All Share Index South Africa 51,951.59 -1.47% NGSE All Share Index Nigeria 32,605.75 -0.52% 2 June ‘15 2 June ‘15 2 June ‘15 2 June ‘15 to own a share of the combined financial services business that will be born out of the merger of UAP Holdings and Old Mutual Kenya. Integration of the two businesses is expected to take six months with a listing at the Nairobi Securities Exchange from 2017. The listing will allow the public to own part of the integrated financial services group as they benefit from a wide range of professional services in life and general insurance, banking, asset management and stockbroking. The integration of the two businesses is under way and it is expected to be completed in the next six months. The newly appoint- ed chief executive of the merged business, Peter Mwangi, told journalists in Nairobi last week that the listing would also enable investors to discover the worth of the amalgamated business. “Our merger is a merger Chance to own a slice of UAP-Old Mutual cake E ast African investors will be given a chance 2 June ‘15 2 June ‘15 tomers in Africa, the Americas, Asia and Europe. The newly formed UAP- Old Mutual Group is however expected to ride on the synergies of the two companies to expand the scope of financial services within the East African Community member states and Africa generally. The group currently has operations in Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo. “The growth and expan- UAP-Old Mutual Group CEO Peter Mwangi speaks at The Stanley Hotel in Nairobi on July 2 at the announcement of a merger of UAP Holdings and Old Mutual Kenya. Picture: File of growth and not cost-cutting,” said Mr Mwangi. “We are happy that the merger has not occasioned any job losses. “Staff members will as- sume new roles with greater responsibility and scope.” He added: “Within the next 18 to 30 months, depending on market conditions, we shall prepare the group for listing on the Nai- robi Securities Exchange.” Old Mutual plc, which is listed on the London Stock Exchange, acquired a controlling stake in UAP Holdings by buying out three private equity firms — Africinvest, Abraaj and Swedfund — which held a combined 37.33 per cent stake in the Kenyan firm. The acquisition raised Old Mutual’s stake in UAP to 60.66 per cent, having initially bought a collective 23.33 per cent of the shares in the latter from investment firm Centum and Kenyan businessman Chris Kirubi. Ride on synergies Old Mutual plc provides investment, savings, insurance and banking services to more than 17 million cus- sion potential of our merged business is huge and there is no doubt that, together, we are greater than the sum of our parts,” said Ralph Mupita, the group’s chief executive in-charge of emerging markets. He added: “Our vision is to build an African financial services champion and the future has never looked brighter for our business on this awesome continent.” Faulu Kenya Microfi- nance Ltd, which is 67 per cent owned by Old Mutual, will become an agent for the new group in distributing its product ranges. Gas explorer Wentworth raises $7.6m working capital WENTWORTH RESOURCES Ltd has raised $7.6 million through a private shares placement to finance development of Tanzania’s Mnazi Bay natural gas concession. The London- and Oslo Stock Exchange-listed firm offered 15.4 million shares to investors and members of its board of directors and executive suite. Joint bookrunners FirstEnergy Capital and Stifel Nicolaus Europe Ltd completed the transaction on June 26. Executive chairman Bob McBean said the cash raised would support the company’s operations until after the first gas sales are made. “The private placement repre- sents a quick and cost-effective method of raising funds neces- Amount Wentworth Resources raised through a private shares placement $7.6m sary to give the company sufficient working capital until projected cash flow from gas sales at Mnazi Bay commences,” he said. The firm estimates gas sales will earn it $3.5 million monthly from the fourth quarter of 2015. Its plan is to reinvest cash flows in Mnazi Bay to drill exploration prospects and grow business by maximising production from discovered gas fields to meet the growing demand for gas in Tanzania. The initial volume will be 80 million standard cubic feet per day (MMSC/D) of natural gas ahead of production being ramped up to 130 MMSC/D in 2016 as demand rises in Dar es Salaam. “Construction of the state- owned and -operated Mtwara-Dar es Salaam pipeline is complete and accompanying processing facilities are nearing completion with precommissioning activities ongoing,” Mr McBean said. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories No ≥ebound fo≥ Mumias Suga≥ soon INVESTORS’ CONFIDENCE in Mumias Sugar Company may take longer to be restored as the firm seeks longer-term solutions to its woes. Two weeks after Kenya’s President Uhuru Kenyatta announced a Ksh1 billion ($10 million) bailout of the troubled company, its share price had slid to Ksh2.30 ($0.02) by close of Friday, down from the Ksh3.50 ($0.03) it had risen to the previous week. Analysts said the bailout was a positive move but long-term investors would want an overhaul and change in management that would give positive returns. Therefore, the share price is expected to remain low for the better part of the year. “I do not even see them going for capital raising because the options are slim; apart from the government, I do not see other institutions willing to settle the Mumias debts,” said John Kamunya, an independent investments analyst. Mumias owes farmers and suppliers up to Ksh6.2 billion ($62 million).
Jun 28th 2015
Jul 12th 2015