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7 Pages«<4567>
Is it the right time to buy CENTUM?
VituVingiSana
#101 Posted : Thursday, October 29, 2020 5:04:58 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,328
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Kusadikika wrote:
Ericsson wrote:
VituVingiSana wrote:
[quote=Ericsson]Centum Real estate to float $37mn bond

Is it in USD?

Further details

https://www.businessdail...bn-housing-bond-2723642[/quote]

Financial gymnastics. Danganya toto jinga.

"We have a receivable of Sh6.8 billion from the sold units, which more than covers the bond redemption value. The bond is therefore a bridging finance solution to finance the construction of the pre-sold units"

This is very clever of Centum but will be very foolish for bond buyers. What Centum is basically doing is telling you to be a Mortgage holder. Nyumba ziko, wakilipa utalipwa, wasipolipa utabaki na nyumba. The bond holders are being sold houses. Is this because there are no real buyers for the houses?
A Bond and Mortgage are siblings. They are both loans.

Centum has entered into contracts to sell the houses and it gets paid over time depending on the contract. Or CentumRE has taken a deposit and will be paid upon delivery of the completed unit.

CentumRE also wants to start new projects while completing ongoing projects so they need the cash today. It's a timing issue more so with COVID.

CentumRE (not the projects) is borrowing and it has multiple projects planned. So it's not Awali or Pearl Marina but CentumRe that's borrowing.

Option 1 - Borrow from a bank. It costs more and has a lot of paperwork associated with it as each house is delivered since the bank has a lien on the entire property.

Option 2 - Issue a bond that isn't tied to a specific project so as sales happen, the transfers are made to the buyers. At the end of 3 years, the bond can be refinanced/reissued or the cash is used to pay off the bond.

As a bondholder, you are given an (call) option and if you so choose, you can either take the cash OR "exchange" part or whole your principal (& interest) for a property. Just like a traded Call Option, you know the underlying asset, Strike Date and Exercise Price.

This is not a bond for those who do not understand the structure but geared towards institutions (eg insurance firms) and HNWIs whose needs for cash are different from most retail investors.


So your Kenya Re may be a buyer similar to the previous issue that was retired in June 2020
I do not sit on the Board or Investment Committee Laughing out loudly but that's a possibility given Kenya Re is cash rich and can diversify its bond holdings.

Insurance firms need to match their assets to their liabilities. There will be a need to pay out some liability or the other in 2023/2024 so this could work for them.

Has Centum released the pricing?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#102 Posted : Thursday, October 29, 2020 5:07:11 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,328
Location: Nairobi
The risk for CentumRE is the ability to collect Receivables as the economy slows down.

Spending by GoK isn't a plus unless it is spent well on infrastructure or income producing assets. Knowing GoK... d'oh! d'oh! d'oh!

Expect more scams as we head into 2022.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Kibe21
#103 Posted : Friday, November 13, 2020 8:13:56 PM
Rank: New-farer


Joined: 8/1/2018
Posts: 44
Location: Nairobi
VituVingiSana wrote:
muandiwambeu wrote:
VituVingiSana wrote:
muandiwambeu wrote:
VituVingiSana wrote:
muandiwambeu wrote:
Ericsson wrote:
Share price on the verge of going below 20

My eyes trained on this, feels like chirubai is letting the flood gates wide open. Sniffing the streets for the bathe,,, ppt overwhelmed,,,,Sad

Waiting for the dividend. I might reinvest it into Centum. It's about patience and one's feelings at the time.

Law #1: Optimism and pessimism will always overshoot because the boundaries of both can only be known in hindsight, once they’re passed. - Morgan Housel

Tomorrow will be a better day. Follow your insinticts.
There is no medicine like hope, no incentive so great, and no tonic so powerful as expectation of something better tomorrow.Pray thePray Pray

For a business like Centum, there will be hits and misses in the portfolio.

Real estate will struggle but unlike HAFR or Cytonn, Centum seems OK. They are going to handover Awali Phase 1 (in Kilifi) to the buyers on 10th October.

Longhorn took a huge hit but schools are re-opening and it has a digital and mobile product now. This is about the future for LKL which owns a lot of content.

We have discussed others e.g. Amu, etc.

At these prices, I would like to average down given the value I see in the future.

What do you think is a good average price down, now that we agree down is the way to go @vvs. In that future I also wish to see centumn unlock it's potential and blow 2500/ on it's way up before I quit.

As long as the fundamentals do not change then the cheaper the better! Applause
I have NO idea how low it can go. If I did, I would sell today and buy later.

When I said "average down" I do not mean I want to do it just to lower my ABP [which I do not really know given I have bought shares over the years] but I see value at 20/- today if one is patient.

2,500/share may be a stretch any time soon unless we have hyperinflation. I will go with Management's assessment of NAV.



at ksh16.75 and still going down. Fundamentals haven't changed to explain the sharp fall, so still a good buy unless you're a short term trader.
Sub 15 is ideal but who knows if it will get to that.
Ericsson
#104 Posted : Friday, November 13, 2020 8:20:23 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
Kibe21 wrote:
VituVingiSana wrote:
muandiwambeu wrote:
VituVingiSana wrote:
muandiwambeu wrote:
VituVingiSana wrote:
muandiwambeu wrote:
Ericsson wrote:
Share price on the verge of going below 20

My eyes trained on this, feels like chirubai is letting the flood gates wide open. Sniffing the streets for the bathe,,, ppt overwhelmed,,,,Sad

Waiting for the dividend. I might reinvest it into Centum. It's about patience and one's feelings at the time.

Law #1: Optimism and pessimism will always overshoot because the boundaries of both can only be known in hindsight, once they’re passed. - Morgan Housel

Tomorrow will be a better day. Follow your insinticts.
There is no medicine like hope, no incentive so great, and no tonic so powerful as expectation of something better tomorrow.Pray thePray Pray

For a business like Centum, there will be hits and misses in the portfolio.

Real estate will struggle but unlike HAFR or Cytonn, Centum seems OK. They are going to handover Awali Phase 1 (in Kilifi) to the buyers on 10th October.

Longhorn took a huge hit but schools are re-opening and it has a digital and mobile product now. This is about the future for LKL which owns a lot of content.

We have discussed others e.g. Amu, etc.

At these prices, I would like to average down given the value I see in the future.

What do you think is a good average price down, now that we agree down is the way to go @vvs. In that future I also wish to see centumn unlock it's potential and blow 2500/ on it's way up before I quit.

As long as the fundamentals do not change then the cheaper the better! Applause
I have NO idea how low it can go. If I did, I would sell today and buy later.

When I said "average down" I do not mean I want to do it just to lower my ABP [which I do not really know given I have bought shares over the years] but I see value at 20/- today if one is patient.

2,500/share may be a stretch any time soon unless we have hyperinflation. I will go with Management's assessment of NAV.



at ksh16.75 and still going down. Fundamentals haven't changed to explain the sharp fall, so still a good buy unless you're a short term trader.
Sub 15 is ideal but who knows if it will get to that.


Half Year Results to be out within the next two weeks will reveal the fundamentals.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Ericsson
#105 Posted : Tuesday, November 17, 2020 8:41:19 AM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
Industrial and Commercial Bank of China (ICBC) has withdrawn funding for the Lamu Coal project
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
VituVingiSana
#106 Posted : Tuesday, November 17, 2020 6:35:19 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,328
Location: Nairobi
Ericsson wrote:
Industrial and Commercial Bank of China (ICBC) has withdrawn funding for the Lamu Coal project
Old news.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
heri
#107 Posted : Tuesday, November 17, 2020 8:54:02 PM
Rank: Member


Joined: 9/14/2011
Posts: 791
Location: nairobi
https://citizentv.co.ke/...fit-90-per-cent-590756/

Centum Group lending subsidiary Sidian Bank has booked a 90 per cent dip in profits across nine months to September 30 with earnings down at Ksh.8.1 million.

The sharp contraction in profits from Ksh.83.5 million last year is highly attributable to a shrink in the bank’s operating income.

Sidian’s net interest income for instance retracted by 17.3 per cent to Ksh.583 million while streams from non-interest funded (NFI) income fell to Ksh.973.1 million from Ksh.1.1 billion last year.

The bank incurred higher interest expenses of Ksh.1.1 billion from Ksh.786 million in 2019 indicated a higher cost of mobilizing customer deposits.
VituVingiSana
#108 Posted : Wednesday, November 18, 2020 5:09:50 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,328
Location: Nairobi
heri wrote:
https://citizentv.co.ke/business/sidian-bank-nine-months-profit-90-per-cent-590756/

Centum Group lending subsidiary Sidian Bank has booked a 90 per cent dip in profits across nine months to September 30 with earnings down at Ksh.8.1 million.

The sharp contraction in profits from Ksh.83.5 million last year is highly attributable to a shrink in the bank’s operating income.

Sidian’s net interest income for instance retracted by 17.3 per cent to Ksh.583 million while streams from non-interest funded (NFI) income fell to Ksh.973.1 million from Ksh.1.1 billion last year.

The bank incurred higher interest expenses of Ksh.1.1 billion from Ksh.786 million in 2019 indicated a higher cost of mobilizing customer deposits.
Tough times. Good to take provisions sooner than later!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#109 Posted : Wednesday, November 18, 2020 8:16:18 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,328
Location: Nairobi
Centum Real Estate Opens KSh4bn Project Bond
https://centumre.co.ke/n...ens-ksh4bn-project-bond/
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
heri
#110 Posted : Wednesday, November 18, 2020 2:56:11 PM
Rank: Member


Joined: 9/14/2011
Posts: 791
Location: nairobi
Balaa
#111 Posted : Wednesday, November 18, 2020 3:16:55 PM
Rank: Member


Joined: 7/6/2018
Posts: 168
Location: Kinshasa
heri wrote:


Same dudes had issued a BUY recommendation for Bamburi a few weeks before the share price started tumbling.

A brokerage firm is like a hype man. He/she has no fiduciary duty. (Someone replied to the tweet with a "SELL,SELL"Laughing out loudly )

Anyway BUY or SELL the broker makes their money.
If it don't make dollars, it don't make sense
Ericsson
#112 Posted : Friday, November 27, 2020 9:17:51 AM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
HY profits drop from ksh.6.6bn to a loss og 2bn
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
maka
#113 Posted : Friday, November 27, 2020 10:15:27 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,368
Location: Nairobi
Balaa wrote:
heri wrote:


Same dudes had issued a BUY recommendation for Bamburi a few weeks before the share price started tumbling.

A brokerage firm is like a hype man. He/she has no fiduciary duty. (Someone replied to the tweet with a "SELL,SELL"Laughing out loudly )

Anyway BUY or SELL the broker makes their money.



Well...d'oh! d'oh! d'oh!
possunt quia posse videntur
Ericsson
#114 Posted : Friday, November 27, 2020 11:04:32 AM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
The biggest loss in the history of the company
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Angelica _ann
#115 Posted : Friday, November 27, 2020 11:48:19 AM
Rank: Elder


Joined: 12/7/2012
Posts: 11,721
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Ericsson
#116 Posted : Friday, November 27, 2020 12:49:00 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
Angelica _ann wrote:
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?


Drop in trading income after disposal of Almasi beverages and stake in Nairobi bottlers.
Drop in investment income,since there was no asset disposal.
Poor performance in Sidian, Longhorn publishers and NAS.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
watesh
#117 Posted : Friday, November 27, 2020 1:28:50 PM
Rank: Member


Joined: 8/10/2014
Posts: 854
Location: Kenya
Angelica _ann wrote:
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?


Last year there was a gain in disposal (Almasi)of about Ksh12bn recognized in the consolidated income statement and the sales by Almasi of ksh4 bn were still being consolidated into the statement. These were not present in the current financial year. There has also been an uptick of losses in some associates and joint ventures (Two Rivers, Sabis, Nas Servair),some of them were not in operation after covid measures kicked in. The rest of the items are largely similar apart from the decrease in interest cost.

Personally, I never look at the consolidated income statement since these are many companies in different industries and shareholding being consolidated together. I look at the company statement to see what comes back as dividend, interest income and gains in disposal of assets. This is what will determine whether I get a dividend or not.
Ericsson
#118 Posted : Friday, November 27, 2020 1:45:44 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,137
Location: NAIROBI
watesh wrote:
Angelica _ann wrote:
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?


Last year there was a gain in disposal (Almasi)of about Ksh12bn recognized in the consolidated income statement and the sales by Almasi of ksh4 bn were still being consolidated into the statement. These were not present in the current financial year. There has also been an uptick of losses in some associates and joint ventures (Two Rivers, Sabis, Nas Servair),some of them were not in operation after covid measures kicked in. The rest of the items are largely similar apart from the decrease in interest cost.

Personally, I never look at the consolidated income statement since these are many companies in different industries and shareholding being consolidated together. I look at the company statement to see what comes back as dividend, interest income and gains in disposal of assets. This is what will determine whether I get a dividend or not.



To reverse that loss into a profit and pay dividend is a tall order.

The next asset to be disposed I see is Sidian bank
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Balaa
#119 Posted : Friday, November 27, 2020 3:03:15 PM
Rank: Member


Joined: 7/6/2018
Posts: 168
Location: Kinshasa
Ericsson wrote:
watesh wrote:
Angelica _ann wrote:
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?


Last year there was a gain in disposal (Almasi)of about Ksh12bn recognized in the consolidated income statement and the sales by Almasi of ksh4 bn were still being consolidated into the statement. These were not present in the current financial year. There has also been an uptick of losses in some associates and joint ventures (Two Rivers, Sabis, Nas Servair),some of them were not in operation after covid measures kicked in. The rest of the items are largely similar apart from the decrease in interest cost.

Personally, I never look at the consolidated income statement since these are many companies in different industries and shareholding being consolidated together. I look at the company statement to see what comes back as dividend, interest income and gains in disposal of assets. This is what will determine whether I get a dividend or not.



To reverse that loss into a profit and pay dividend is a tall order.

The next asset to be disposed I see is Sidian bank


Would that (i.e continued disposal) not be tantamount to swimming naked as the tide is yet to completely go out?
If it don't make dollars, it don't make sense
watesh
#120 Posted : Friday, November 27, 2020 4:38:28 PM
Rank: Member


Joined: 8/10/2014
Posts: 854
Location: Kenya
Ericsson wrote:
watesh wrote:
Angelica _ann wrote:
Ericsson wrote:
The biggest loss in the history of the company


Why the big loss, contributed by?


Last year there was a gain in disposal (Almasi)of about Ksh12bn recognized in the consolidated income statement and the sales by Almasi of ksh4 bn were still being consolidated into the statement. These were not present in the current financial year. There has also been an uptick of losses in some associates and joint ventures (Two Rivers, Sabis, Nas Servair),some of them were not in operation after covid measures kicked in. The rest of the items are largely similar apart from the decrease in interest cost.

Personally, I never look at the consolidated income statement since these are many companies in different industries and shareholding being consolidated together. I look at the company statement to see what comes back as dividend, interest income and gains in disposal of assets. This is what will determine whether I get a dividend or not.



To reverse that loss into a profit and pay dividend is a tall order.

The next asset to be disposed I see is Sidian bank


From what I understood (I may be wrong), there is a lot of liquidity coming in from the real estate business but it isn't flowing through the company's income statement. So when Centum Re pays the parent company Centum the money comes in as debt repayment of the shareholder loans rather than dividends (They didn't input a lot of share capital to the subsidiary but lent money). It is visible in the company's cash flow statement. The CEO indicated this is enough to sustain the dividend.

Sidian for now is still lagging behind as compared to its peer of similar size which is Credit Bank. It may not fetch a good market price.
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