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The East African : November 25th 2013
52 NOVEMBER 23-29,2013 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,054.21 0.21% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 1,841.12 0.34% USE All Share Index Uganda 1,602.20 0.58% JSE All Share Index South Africa 44,457.35 -1.77% NGSE All Share Index 39,165.45 Nigeria - 3.47% EGX Share Index Egypt 6,457.01 3.68% Uganda NIC main sha≥eholde≥ in ≥ights issue T he main shareholder of Uganda’s National Insur- ance Corporation (NIC) plans to take up its stake in a rights issue that kicked off on Friday. Industrial and General In- surance Company Ltd (IGI) of Nigeria, which owns 60 per cent of NIC through Corporate Holdings Ltd, has said that it intends to take up the rights which it is entitled to. According to the Uganda Securities Exchange’s information memorandum, a minimum of 40 per cent of the rights issue or 129.24 million of the 323.1 million shares on offer must be accepted for the cash call to be declared a success. IGI’s announcement gives the issue, which will be open through December 13, very high chances of realising its goal. “Corporate Holdings, whose shareholding comprises 60 per cent of the issued and fully paid up share of NIC, intends to take up its rights, provided the maximum shareholding of Corporate Holdings is limited to 60 per cent of the post-rights issue issued and fully paid up shares of NIC,” notes the information memorandum. NIC says that in the event the minimum amount is not attained, it may seek approval of workflow processes and the rebranding of the insurer while providing working capital. The shares are being offered at a 25.71 per cent discount on their last traded price of Ush35 ($0.01) on the USE, which is the same price at which it closed the end of last year. NIC’s joint lead transaction advisors Crested Stocks and Securities and Standard Investment Bank said the insurer’s net asset value per share as at the end of December last year and June this year was Ush65.85 ($0.026) and Ush71.64 ($0.028) respectively. This means that shares un- National Insurance Corporation offices in Kampala. Its main shareholder, Industrial and General Insurance Company Ltd (IGI) of Nigeria, plans to take up its stake in the forthcoming rights issue. Picture: Morgan Mbabazi from the Capital Markets Authority to proceed with the listing of the accepted fully paid new shares, and may consider raising other capital in future. Each share is being sold for Ush26 ($0.01) in the ratio of four shares for every five held to existing shareholders who had to be on the register by November 15. NIC, which is the largest private insurance company in Uganda, is undertaking the first cash call by a listed company in any of the four East African bourses this year, and is seeking to raise Ush8.4 billion ($3.3 million). NIC chairman Remi Olowude, in disclosures contained in the information memorandum, said that part of the proceeds from the rights issue have been earmarked for financing the automation IGI shares are being offered at a 25.71pc discount on their last traded price of Ush35 ($0.01) on the USE. der the cash call are being offered at a 63.71 per cent discount based on the latest net asset value for the period ended June this year. Its largest shareholder, IGI, is among the largest insurance companies in Nigeria and among the largest underwriters in West Africa. As of August this year, Crane Bank held a 10.33 per cent stake or 41.72 million shares of NIC, Sudhir Ruparelia, the single largest individual shareholder, held a 10.27 per cent stake or 41.48 million while 1,802 shareholders controlled the remaining 19.39 per cent or 78.46 million shares. Ba≥clays Kenya the odd man out as p≥ofits sh≥ink THE ROLL of honour is out for Kenya’s top five banks. Barclays Kenya’s net earnings fell by 10.25 per cent in the first nine months of the year on rising costs. This means that, of the five top banks — Barclays, Equity, KCB, Standard Chartered and Co-operative Bank —only Barclays posted a fall in profitability in the results released Friday. Barclays on Friday said its net profit fell to Ksh5.6 billion ($65.8 million) from Ksh6.2 billion ($72.5 million) in the same period last year. Standard Chartered Bank posted a 5.7 per cent growth in net profit, the slowest of the five banks. The lender’s net profit stood at Ksh6.8 billion ($79 million) in the period compared with Ksh6.4 billion ($74.4 million) a year earlier. KCB, Co-operative Bank and Equity Bank posted profits of 15.4 per cent, 17.4 per cent and 7.2 per cent respectively in their quarter three results. Improved profitability among the banks was attributed to increased lending. Co-operative Bank rod on cheap deposits and increased lending. KCB and Equity rode on a strong performance from the subsidiaries and agency banking cou- pled with the favourable lending rates. So, what went wrong at Barclays? “Earning per share was down 9.6 per cent weighed down by higher than expected operating expenses. Over the past three years, BBK’s net interest revenue has remained flat, piling pressure on earnings at a time when balance sheet growth had stagnated,” said analysts at Standard Investment Bank. For investors, it looks as though, unless some- thing drastic happens, banks are on track to maintain last year’s profitability or surpass it. 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 Uchumi’s wise move ab≥oad FOR UCHUMI, venturing in Uganda and Tanzania has not been a bad bet at all, looking at the regional retail chain’s revenues. The contribution to sales of Uchumi Supermarkets’ Tanzania and Uganda subsidiaries has risen to 14.5 per cent in the past four years, reducing the retailer’s reliance on Kenya, which is still its largest market. An analysis of latest data from the supermarket chain shows that during the period ended June, Kenya contributed 85.5 per cent of the firm’s Ksh14.3 billion ($165.9 million) sales with the rest coming from its Tanzania and Uganda subsidiaries. And Uchumi Supermarkets in- formation memorandum shows that Tanzania and Uganda contributed Ksh2.07 billion ($24.1 million) of sales. But the two units made a combined loss before tax of Ksh387.6 million ($4.5 million) for the period ended June 2013 compared with Ksh218.5 million ($2.5 million) for the period ended June 2012.
November 18th 2013
December 2nd 2013