• Uganda - 364 DAY Treasury Bill
  • Issue No:1089
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Tourism stakeholders at the Coast have welcomed the reduction of fares by local airlines saying this would increase domestic travel and boost the industry . They said the discounted fares for tourist destinations and the introduction of night passenger train by the Standard Gauge Railway (SGR) would significantly increase the number of domestic travellers.

A veteran hotelier Fred Kiuru said since the outbreak of coronavirus, the industry has largely been sustained by local tourists.

“Such initiatives must be encouraged as the hospitality industry has been badly affected by the Covid-19 pandemic,” said Kiuru during an interview with Kenya News Agency on Monday.

The local airlines Jambojet, Fly 540 and Kenya Airways have announced special offers from Nairobi to tourist destinations of Mombasa, Malindi and Diani.

On January 5, Jambojet offered passengers 10,000 seats at Ksh2,100 during a three days’ sale which was part of the #NowTravelready campaign. The tickets will be valid for local travel between 11 th January and 20 th March 2021.

The national carrier Kenya Airways has reduced its fare from Nairobi to Mombasa to Sh4,300 while Fly 540 is now charging Sh3, 400.

During the December holidays, the same airlines were having fares of up to Sh15, 000 for one way only.

Early this month, Kenya Railways introduced the third pair of passenger trains on its SGR service (Madaraka Express) that operates from both ends of the line in Nairobi and Mombasa at 9pm and arriving at 3am.

This is in addition to two other trains that operate in the morning and afternoon which were launched in June 2017.

Mombasa and other coastal areas are the preferred holiday destinations for many Kenyans and foreign visitors to savour their beautiful sandy beaches stretched out from the South to the North Coast and tropical ambience.

Kiuru said the introduction of cheaper fares by the airlines was a huge boost towards efforts to revive tourism sector in the country.The same sentiments were expressed by a South Coast travel agent Stephen Mule who said the industry needed all the support to recover from the Covid-19 pandemic. “The pandemic has brought nothing but bad news for the tourism industry,” said Mule.He added that many establishments and other related tourist businesses were trying to stay afloat after being forced to close down that also saw thousands of employees losing jobs.However, despite the Covid-19 pandemic, the industry enjoyed booming business during the December holidays where some hotels recorded impressive bookings with locals […]

IN the coming week, we still prospect that the market will remain vibrant going forward specifically on the banking sector and Cement sector as we have seen the previous week’s top counters coming from those sectors. The market will remain active during the week and mainly from the top local active counters.

JATU Plc share price expected to decline at the bourse, it is likely that it may remain active for some coming trading sessions, but we remain wary with the decline in the volume to be traded.

CRDB is likely to be the most active counter and this has been due to analysts and traders’ expectations on the 2020 performance of the bank, and hence creates higher demand for the shares and will push the price higher in the coming week.

Other top counters expected to transact during the week include TBL, TPCC, NICOL, SWIS and DSE. In midweek we expect a Treasury bill auction to be held by the central bank.

There could be slight increase in the WAY with low volatility towards decline in yields for the short-term instruments, but with a likelihood of oversubscription as we have observed the yields started to increase for treasuries.

In the interbank money market, despite the increase in the Weighted average rate (WAR) during the previous week, we still reiterate foresee that WAR will continue to be stable and within a range of 3.50 per cent to 4.00 per cent with slight volatility in the high and low rate.

The Bourse During the week, total market capitalisation lost by 1.03 per cent to close the market at TZS 14.97 Trillion from TZS 15.09 Trillion in the previous week mainly due to share price depreciation of both cross listed and locally listed firms at the bourse.

CRDB share price increased by 9.76 per cent to close at TZS 225, DSE share price increased by 2.22 per cent to close at TZS 920, NMG share price increased by 1.56 per cent to close at TZS 325 while EABL declined by 3.07 per cent to close at TZS 3,160, KCB declined by 3.75 per cent to close at TZS 770, JATU share price declined by 18.37 per cent to close at 2,400 and JHL share price declined by 0.82 per cent to close at TZS 6,050.

Domestic market capitalisation gained by 0.69 per cent thanks to share price appreciation of CRDB and DSE. TSI gained 0.69 per cent to close […]

Some employees of the troubled Tuskys Supermarket chain in Nakuru have called for the establishment of an independent regulator to monitor growth and control expansion of retail outlets in Kenya.

Tuskys Nakuru Branch manager Mr. Samuel Ikonya said thousands of lives have been ruined after the collapse of retail enterprises in Kenya due to the ‘ruthless and competitive nature of the business’.

“What is happening at Tuskys is now a familiar script in the country’s retail sector. We are only left with this outlet in Nakuru after closing our flagship Magic branch. We are now operating with skeleton staff after hundreds were laid off,” he said.

“No new supplies of goods are coming in against a background of creditors who include suppliers, landlords and banks demanding to be paid their dues running into millions of shillings,” stated Mr. Ikonya.

While wading into the debate on troubled retail sector recently, Governor Lee Kinyanjui had noted that due to lack of regulation, the sector’s landscape was in a sorry state and the situation has seen giants such as Nakumatt and Uchumi wiped out of the market while Tuskys was fighting for survival.

“The role of a structured retail outlet is critical for the distribution of local goods both locally and regionally as when Nakumatt closed shop in Tanzania, our exports to that country dipped significantly,” noted governor Kinyanjui.

“As we continue to witness the replacement of local retails with foreign chains, it must not be lost on us that the priority of any retail chain is to act as a marketing point for products from its mother country,” stated the governor in an interview.

For 47 year old Tuskys employee Jotham Nandwa, nothing could lift the gloom. Not even the reassuring words from his boss Mr. Ikonya that all shall be well.

“The few of us remaining on the staff list still show up at work every single day with hope that things will get better. We now work for a pittance. For the last six months, we have not received our salaries yet we have school fees obligations and mouths to feed,” Nandwa said.

“It is a double tragedy for some of my colleagues who thought they had found a new lease of life here after they were laid off by their previous employer-Nakumatt, which went under two years ago,” Nandwa reminisces ruefully.

For 28 year old Anne Gitonga who had leased space at the once giant retail outlet to […]

COMESA Business Council Chairman Marday Venkatasamy. PHOTO | COURTESY Highlight:

Intra-COMESA trade, 2019

USD22.1 billion – Total intra- COMESA trade.

USD10.9 billion – Total intra- COMESA exports.

USD11.2 billion – Total intra- COMESA imports.

On 20th and 21st January 2021, Kigali will host a high-level public-private dialogue on the development of a low value retail common digital payment policy for COMESA. Convened by COMESA Business Council (CBC) and the Eastern and Southern Africa Trade and Development Bank (TDB), the meeting’s objective will be to validate and adopt the draft model COMESA digital integrated common payment policy for Micro Small and Medium Enterprises (MSMEs).

The event will bring together central bank governors, ministers of finance, ICT regulators, manufacturers, mobile network operators, commercial banks, Fintechs, microfinance institutions, and MSMEs, to consider and adopt the COMESA digital integrated common payment policy and framework for MSMEs. The outcomes of the meeting will underpin the development of a business model and infrastructure for a low-cost retail digital payment scheme for MSMEs within COMESA region.

“MSMEs play a critical role in contribution to gross domestic product (GDP) in COMESA. Cross border markets provide an opportunity for MSMEs to expand their enterprises, while simultaneously addressing unemployment and enhancing economic growth within the region,” cited Sandra Uwera, the Chief Executive Officer of CBC.

COMESA, a market with a population of 583 million people covering a geographical area of 12 million (sq km), presents the largest trade bloc in Africa. As at 2019, COMESA exported goods to the value of USD112 billion, imported goods worth USD212 billion, and had a trade deficit of USD76 billion. Intra-COMESA exports were worth USD10.9 billion, and intra-COMESA imports were worth USD11.2 billion. The total intra-COMESA trade stood at USD22.1billion in 2019. As part of the larger Continental Free Trade Area, COMESA has a prosperous market that can effectively lead in agricultural trade, manufacturing and professional services.

The region’s trade facilitation mechanisms however still require strengthening to ensure sustainable value chains and supply chains across borders with free movement of goods and services. “The impact of COVID-19 on conventional supply chain networks has created a sense of urgency in facilitating efficient local sourcing of inputs by SMEs. Frictionless transactions that are fast and low cost are therefore central to the enhancement of intra-regional trade and economic development,” said Mr. George Odhiambo, Managing Director of KCB Bank Rwanda Plc, and member of the CBC Digital Financial Inclusion Advisory Committee.

Judith Obholzer, Managing Executive […]

NSE trading floor. FILE PHOTO | NMG A record number of profit warnings by commercial banks has left their shareholders at risk of missing dividends worth over Sh33 billion after the lenders were forced to cut or suspend the payments to conserve cash in the wake of the Covid-19 crisis.

An unprecedented six of the 11 Nairobi Securities Exchange (NSE)-listed banks have warned that their profits will fall by more than a quarter—painting a bleak dividends outlook.

“It is unlikely that you issue a profit warning and then pay a dividend because what you are trying to do is to ensure that you retain cash in the business to keep going in the challenging circumstances,” ICEA-Lion Asset Management chief executive Einstein Kihanda said.

The freeze on dividend payouts will see investors miss about Sh33 billion, going by the 2019 payouts or Sh40.47 billion that was paid in the previous year.

Most of the lenders, including Standard Chartered Bank Kenya, Absa Kenya, Cooperative Bank of Kenya, DTB, I&M Holdings and NCBA, have all issued profit warnings.

KCB, Equity, Cooperative Bank, Absa, Stanbic, DTB, Standard Chartered Bank of Kenya, NCBA and I&M saw a combined 29.2 percent or 23.36 billion decline in profitability in the nine months to September.

In terms of falls in net profit, Absa took the heaviest hit (65.4 percent), followed by NCBA (45.3 percent), KCB (43.2 percent), Stanchart (30.41 percent) and Stanbic (30.1 percent).

Several chief executives now say they will give priority to cash-preservation as they seek strong capital buffers in line with a Central Bank of Kenya (CBK) circular issued last August.

KCB Group already skipped the Sh1 per share interim dividend or an equivalent of Sh3.21 billion, amid a 43.1 percent fall in nine month earnings, and says it will require CBK clearance in case it settles on any final payout.

“Our priority is to preserve our cash resources as we look at the options for supporting customers during the crisis,” said KCB Group CEO Joshua Oigara in an interview after releasing the nine-month results.

“We have no concern at our cash level but we are looking at CBK guidance and we will consult them before end of March.”A dividend freeze by KCB will deny investors Sh11.24 billion, going by the previous payout by the country’s most profitable bank.Equity Group, which last year declared Sh9.4billion dividend but later suspended it on cash preservation claims, maintained that any such payouts for this year would depend […]

NAIROBI — Kenya Airways plans further pay cuts for employees of as much as 30% after the airline was hit by the coronavirus pandemic that has caused a slump in air travel, an internal memo showed on Friday.

The cuts follow those made in March last year following Kenya’s first confirmed COVID-19 case, which prompted the government to suspend domestic and international commercial passenger air travel.

The latest cuts, of 5% to 30% for workers with monthly earnings exceeding 45,000 shillings ($409), take effect this month and will run for six to 12 months, the company’s CEO Allan Kilavuka said in an internal memo seen by Reuters.

He said in the memo that the company was grappling with debts which are at an unsustainably high level.

Kenya Airways declined to comment.

Although domestic air travel resumed in Kenya in July, followed by international routes a month later, demand has stayed below pre-pandemic levels.

In August, Kenya Airways said it had laid off about 650 workers, a month after announcing plans for an unspecified number of layoffs, cuts to its network and the offloading of some assets.

At the time it forecast a fall in 2020 revenues of between 60 billion and 70 billion shillings as demand for the rest of the year was expected to be less than half that of 2019.

Trade in the company’s shares on the Nairobi Securities Exchange has been suspended, pending a government restructuring plan, after it submitted a draft law to parliament on nationalizing the airline.

African airlines could lose $6 billion in passenger revenue in 2020 after the pandemic grounded much of the global aviation industry, the International Air Transport Association said in April last year. ($1=110.0000 Kenyan shillings) (Reporting by George Obulutsa; Editing by Clarence Fernandez and Jane Merriman)

Kenya Airways and Air France KLM Group have agreed to mutually terminate their Africa-Europe joint venture partnership from 1 September, 2021, the airlines said in Nairobi on Monday.

The airlines had previously suspended the Joint Venture cooperation for the calendar year 2020 mainly due to the coronavirus (COVID-19) pandemic and subsequent unpredictability of return to normalcy in operations, they said in a statement.

“This development allows Kenya Airways to offer additional options and convenience to our customers connecting through our European gateways in line with our goal of supporting the recovery of international tourism in Kenya and connecting Africa to the World, and the World to Africa,” said Kenya Airways CEO Allan Kilavuka.

Kenya Airways will continue to serve the Europe market through its gateways of London, Paris, Amsterdam with Rome slated for resumption from 2021.

The Kenyan authorities are working on a plan to convert the Kenya Airways into a state-run enterprise years after it was partially privatised through an Initial Public Offering (IPO) at the Nairobi Securities Exchange.

The airline is owned by the government of Kenya, which controls 48.8 per cent of the company.

A consortium of banks, which formed a company called KQ Lenders 2017, currently owns38.1 per cent while the Royal Dutch KLM, owns 7.8 per cen of the company.

The remaining shares are held by minority shareholders through the NSE. The KQ-KLM joint venture cooperation covers seven routes in Europe and Africa.

“These routes will be served by onward codeshares from the Air France KLM group and additionally with our ever-expanding network of European carriers including Alitalia, British Airways, Lufthansa, and Swiss International Airlines, amongst others,” the airline said. Kenya Airways partnership with Air France KLM covers joint ticket sales across Europe. The ticket sales are done in close co-operation with Air France KLM.

KLM and Kenya Airways have a joint venture on seven routes between Europe and Africa.

The Joint Venture Routes cover Kenya – Nairobi, Kisumu, Malindi, Mombasa, Tanzania – Dar es Salaam, Kilimanjaro, Zanzibar, Mwanza. Uganda – Entebbe, Zimbabwe – Harare, Rwanda – Kigali, Zambia – Lusaka, Livingstone, Ndola, Malawi – Lilongwe, Blantyre, Burundi – Bujumbura.It also covers the London- Heathrow (LHR), London flights operate daily overnight Southbound and daytime Northbound from LHR Terminal 4 to Jomo Kenyatta International Airport, NBO, with a Boeing B787-8 Dreamliner, according to the airline.Convenient UK connections are available from 16 UK Airport with KLM via our Amsterdam schedule and Air France via our Paris […]

Kenya Airways Boeing 737-800 © Tis Meyer (PlanePics.org) Kenya Airways (KQ, Nairobi Jomo Kenyatta ) and other Kenyan airlines will, by end of March 2021, commence direct flights between Nairobi Jomo Kenyatta and Hargeisa , the capital of Somaliland, the breakaway region of Somalia seeking international recognition.

In a move that has angered Mogadishu, Kenya openly recognised the secessionist region by announcing it would open a consulate in Hargeisa by the end of March 2021, while Somaliland would simultaneously upgrade its liaison office in Nairobi.

The announcement was made in a joint statement after a two-day official visit to Kenya on December 13 and 14 by Somaliland president Muse Bihi Abdi at the invitation of Kenyan president Uhuru Kenyatta.

The move was not well received by the Somali government which cut diplomatic ties with Kenya on December 14, the day after Adbi arrived in Nairobi. In a late-night announcement on national television, Somali Minister for Information Osman Dubbe accused Kenya of constantly interfering with Somalia’s internal affairs and of violating Somalia’s sovereignty. He said Kenyan diplomats in Mogadishu had seven days to…

Kenya Airways (KQ, Nairobi Jomo Kenyatta ) has moved into a market gap left my stricken South African Airways (SA, Johannesburg O.R. Tambo ) by operating direct freighter services out of SAA’s hub in Johannesburg O.R. Tambo to Southern African destinations. Previously, all Kenya Airways traffic departing from Johannesburg had to pass through the Kenyan flag carrier’s Nairobi Jomo Kenyatta hub.

The airline said in a statement that it planned to operate directly from Johannesburg to Maputo , Harare Int’l , Lilongwe , Lusaka , and Dar es Salaam . According to the cargo flight schedule published on its website, the first freighter flight, KQ2775, from Johannesburg departed for Lusaka and onto Lilongwe on November 25. Another cargo flight, KQ2742, routed from Johannesburg to Maputo back to Nairobi on November 26.

The airline has two B737-300(F) s in its fleet: 5Y-KQC (msn 29088) and 5Y-KQD (msn 29750). It also makes use of bellyhold capacity on its passenger fleet of two B737-700 s (inactive), eight B737-800 s, nine B787-8 s, and…

Here are analysts’ top stocks to buy in the first quarter.

The S&P 500 closed out 2020 at all-time highs on optimism surrounding additional government stimulus measures and a potential global economic rebound in 2021. Investors are mostly looking past horrible 2020 earnings numbers and focusing on the path forward for the economy, but there is still significant uncertainty surrounding when, if ever, certain businesses will fully recover to pre-crisis levels. Bank of America recently released its quarterly list of the top eight stocks to buy in the first quarter. These eight stocks are high-conviction investment ideas that have market-moving catalysts coming sometime in the next three months.

Citigroup (ticker: C)

Analyst Erika Najarian says Citigroup is a particularly attractive value stock within an already undervalued financial sector that is poised to outperform in 2021. Bank of America is projecting both a macroeconomic rebound and a rebound in 10-year Treasury yields to 1.5% in the second half of 2021, both of which are bullish for Citigroup. The stock is priced at just 85% of tangible book value, which Najarian says doesn’t reflect its potential for roughly 10% normalized return on tangible common equity. Bank of America has a “buy” rating and $79 price target for C stock.

Foot Locker (FL)

Analyst Robert Ohmes says Foot Locker is a play on the strong performance of the Nike (NKE) product portfolio at a sharp valuation discount to Nike shares. Nike is making strategic exits from stores such as J.C. Penney, Belk and Dillard’s (DDS), which should create gross margin tailwinds for Foot Locker as a key Nike strategic partner. In fact, Ohmes says 70% of Foot Locker stores are located within two miles of a competing store that is either closing or Nike is exiting. Bank of America has a “buy” rating and $55 price target for FL stock.

Kansas City Southern (KSU)

Analyst Ken Hoexter says Kansas City Southern is an under-the-radar growth story among Class I Railroad stocks. Kansas City Southern generated better than peer average carload growth in 11 out of the past 12 quarters heading into the fourth quarter of 2020. Hoexter says Mexican industrialization, energy reform and cross-border commerce will be tailwinds for Kansas City Southern. He is projecting $150 million in 2021 cost savings from the ongoing precision scheduled railroading initiatives. The company is also only modestly exposed to the challenged coal industry. Bank of […]

(Ecofin Agency) – Equity Bank Kenya will obtain a loan portfolio guarantee of $50 million from the Dutch Development Finance Fund (FMO) to support SMEs in Kenya. This risk-sharing facility will be provided under the Nasira program, launched by the Dutch agency with the support of the European Union.

Commenting on the deal, Linda Broekhuizen, Interim CEO of FMO, said financing micro, small and medium enterprises is critical to reducing the impact of the pandemic on the livelihoods of people and their communities.

Nasira, which finances companies in sub-Saharan Africa and parts of Europe, has since 2020 expanded its focus to include companies in difficulty as a result of covid-19.

The guarantee granted will cover loans provided by the Kenyan bank to micro, small and medium-sized enterprises (MSMEs) whose activities have been severely affected by the health crisis. Businesses run by women and those in the agricultural value chain will also be eligible for this financing.

The loan portfolio of Equity Group, the parent company of Equity Bank Kenya, grew by 30% to 453.9 billion shillings ($4.1 billion) at the end of September 2020.

Chamberline MOKO