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KENOL KOBIL .... 2012
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Cde Monomotapa
#781 Posted : Wednesday, June 20, 2012 11:25:43 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
the deal wrote:
My take:

1. The shares where unfairly suspended from trading by the CMA, so there was no need to keep them suspended since they didn't suspend PAI from trading despite the bid from Sanlam.

2. Puma Energy might have walked away...it happened to Nedbank and HSBC due to:-

i. couldn't agree on a strike price with the big guys
ii. Discovered some rot on KK's books

3. The deal is still on and an announcement is imminent

The Deal smile
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mwekez@ji
#782 Posted : Wednesday, June 20, 2012 11:27:06 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
youcan'tstopusnow wrote:
A CFC guy called me trying to persuade me to sell.Laughing out loudly
Are they serious? Hahahahaha!
Anyone else been called?


Ati sell Laughing out loudly Laughing out loudly Laughing out loudly

Unless they have info on the whats going on so that one can do it at the right price
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mwanahisa
#783 Posted : Wednesday, June 20, 2012 11:36:10 AM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
@The Deal,

In the absence of any other information, I will lean towards the fact that a deal is still on. The 6 weeks period for due diligence has expired and hence the shares have resumed trading in accordance to the cautionary issued on May 7th.

the deal wrote:
My take:

1. The shares where unfairly suspended from trading by the CMA, so there was no need to keep them suspended since they didn't suspend PAI from trading despite the bid from Sanlam.

2. Puma Energy might have walked away...it happened to Nedbank and HSBC due to:-

i. couldn't agree on a strike price with the big guys
ii. Discovered some rot on KK's books

3. The deal is still on and an announcement is imminent
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selah
#784 Posted : Wednesday, June 20, 2012 11:54:03 AM
Rank: Elder

Joined: 10/13/2009
Posts: 1,950
Location: in kenya
Deal or No deal nothing will change on my part....although full disclosure shld be made.If this deal dies in a murky kind of way ,then definitely there will be something in KK books that spooked Puma...and that is not a good thing.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Cde Monomotapa
#785 Posted : Wednesday, June 20, 2012 12:15:51 PM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
"White smoke! * 3 We want white smoke!"
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mkonomtupu
#786 Posted : Wednesday, June 20, 2012 12:29:44 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
that profit warning feels like de javu all over again 2008-2009...every time the international oil prices dip Kenol and Total take a hit they are left with expensive oil to sell in a regulated market. Unless GoK removes those price controls the oil majors will have major cash flow to deal with...I continue to keep off oil stocks till GoK removes the price controls
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selah
#787 Posted : Wednesday, June 20, 2012 12:57:43 PM
Rank: Elder

Joined: 10/13/2009
Posts: 1,950
Location: in kenya
I think The profit warning is a stopgap measure to arrest speculative trading.The factors given were definitely anticipated by the management.Last yr the same factors affected KK's profitability why shld they highlight them now?

For instance, Interest paid nearly Tripled in 2011 from 544M to 1.4B movement on hedge reserve went from a loss of 14M to a loss of 1.5B.

So, unless KK's risk management is a joke then I hope this is just an excuse to deter speculator...if its not, then we are in for a big shock.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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VituVingiSana
#788 Posted : Wednesday, June 20, 2012 1:14:40 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,354
Location: Nairobi
The losses due to hedging/derivatives were mentioned in the Annual Report. Read the Chairman's Statement.

Anyway, with the crazy movement of the KES in Dec 2011 from 83 to 107, it seems KK entered into some bad hedges with the KES/USD. It is hard to blame KK when it's a crazy volatile market.

Also the oil prices were climbing fast so were there other 'failed' hedges i.e. buy oil at higher prices when Brent is how at $96 vs $115 then?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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selah
#789 Posted : Wednesday, June 20, 2012 1:24:49 PM
Rank: Elder

Joined: 10/13/2009
Posts: 1,950
Location: in kenya
@VVS I thought hedging sole purpose is to cushion a company against volatility.

Whats the point of hedging if in a volatile environment you loose by huge margins.....and not in a single financial year but in a subsequent year.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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VituVingiSana
#790 Posted : Wednesday, June 20, 2012 2:14:33 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,354
Location: Nairobi
selah wrote:
@VVS I thought hedging sole purpose is to cushion a company against volatility.

Whats the point of hedging if in a volatile environment you loose by huge margins.....and not in a single financial year but in a subsequent year.
True but they must have hedged one-way. The problem in KE is the lack of enough derivatives i.e. Banks will sell you Forwards but the other side doesn't work as well...

In KK's case, as a NET buyer of $, they can enter into Forwards [supply KES for USD] but not into the other side i.e. offer to sell USD for KES.

It seems KK hedged by entering into forwards i.e. asked for $ in the future by supplying KES at a 'fixed' price. The price was probably higher than the current spot rates of 83-86.

IMHO, the KES is too strong [GoK/CBK is paying very high interest rates] & hurting local manufacturers & farmers. Farmers compete against 'cheap' maize, pay 25% in interest, etc

Perhaps, Kenya needs a WEAKER (but not too weak) KES that gives local farmers & manufacturers a price advantage. Lower interest rates would help as well.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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