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Hi-Lo		#21 Posted : Thursday, September 10, 2009 11:39:00 AM
Rank: Member Joined: 10/5/2007 Posts: 91		...saw in their docs that there'll be a Bondholders AGM...akin to Shareholders AGM?!! Are they foreseeing default? Sure it's difficult to decide whether be Share or Bond Holder...but not both. Playing the stock market without insider info...is like buying a cow in the moonlight.
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Ericks		#22 Posted : Thursday, September 10, 2009 11:53:00 AM
Rank: Member Joined: 7/29/2008 Posts: 170		@ Mukiha.. i would buy the bond hold it to completion of the projects first phase then trade it in the secondary market and load on the share.... Its just me whatever choice you make in life make sure that you can live with it.
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mtaalam		#23 Posted : Thursday, September 10, 2009 12:55:00 PM
Rank: Member Joined: 11/2/2006 Posts: 519		@ ecstacy. With that inflation rate (23.5%) where else would you invest to counter the effects as there's not a lot you can invest in and get a return higher than 20%. Bright and interesting people talk about ideas. Those of average intelligence talk about things. Stupid people talk about other people.
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ecstacy		#24 Posted : Thursday, September 10, 2009 1:12:00 PM
Rank: Elder Joined: 2/26/2008 Posts: 4,449		In my humble view inflationary pressure is a strong factor here. most in SK are seeking the highest return on investment as simply compared to a 'safe haven' for their cash,as such if you make selective investments in stocks and real estate with the same 10 year maximum bond holding period,the average annual returns for the same period are definately going to be a lot higher than what the 'safe' bond is offering. That is the best it can get.
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Kausha		#25 Posted : Thursday, September 10, 2009 1:15:00 PM
Rank: Member Joined: 2/8/2007 Posts: 808		My back of the envelope calculations were very flawed,may be allowed to retract them by the forum. It is indeed a very good bond. It's shorter than the IFB so the lower rate 12.5% makes sense but its way up stanbic given no WHT making the effective yield 14.71%. They are not doing hydro perse,the bulk of the 15B chums (12B) is going into Kipevu 3 thermal which will produce 120mw while additional turbines on kindaruma and kiambere will give them additional efficiencies of up to 60mw. The turbine projects should be up and running in april 2010,infact they were already pre funded and work is underway the clawback funds will used in masinga dam to add more turbines. the green shoe funds are for eburu,sondu additional turbines and more turbines in kiambere. Kipevu 3 will be switched on in october 2010. The clincher which most of us unsuspecting wananchi and our often lazy and gullible media don't know is that kengen is paid for installed capacity of those hydro so even when there is kiangas,provided they can produce above threshold we pay in full as if they are producing fully,same way IPP's are paid yaani take or pay..i don't know where we all were when ERB was agreeing to this formula but i know they did and that's why KPLC passed the burden to us generously. In short go long debt and equity as well it makes a lot of sense but as a consumer go short if ever can do it
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mukiha		#26 Posted : Friday, September 11, 2009 7:06:00 AM
Rank: Elder Joined: 6/27/2008 Posts: 4,114		@kausha; The rationale behind the installed capacity charges is similar to that of car-hire charges. You are charged fixed daily rate and a mileage premium [for distances above a certain limit]....even if you don't use the car,you have to pay for keeping it.... This arrangement makes sense because the normal practice is to have about 15% to 20% excess installed capacity. The guy that installs the excess must be paid for keeping it idle! Anyway,the capacity charges are minuscule compared to generation charges. Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Kausha		#27 Posted : Friday, September 11, 2009 11:17:00 AM
Rank: Member Joined: 2/8/2007 Posts: 808		Mukiha I know that argument,and especially for IPP's who have to literally fly in huge engines to do thermal for a fixed period,however i don't agree the same should apply for kengen's hydro plants. There are so many factors that could severely undermine hydro power key being hydrology and bear in mind most of these plants apart from sondu were constructed in the 40's,50's and 60's meaning their condition could be dubious. Imagine paying xxx for turkwell. Surely since 60's is enough time to have recouped your investment and to charge capacity charge for such plants and those others that are going to be with us for more than 20 years smacks of a rip off of wananchi. even when they are producing 50% they still get capacity fees on the full which is ridiculous when compared to thermal plants that can produce power continuosly provided the engine is super condition and there is fuel If you look at the IM page 182 you will realize what you say about capacity charge being miniscule is wrong actually generation charge is the miniscule number. For existing hydros we are paying a capacity charge of 1.56 per unity installed and 0.03 shs for energy produced. A case of the car hired given having a low battery and no fuel.
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Ericks		#28 Posted : Monday, September 14, 2009 8:09:00 AM
Rank: Member Joined: 7/29/2008 Posts: 170		@ Mukiha the type of inflation to use in this analysis depends on the individual objecive towards investment.... the purpose of any investment is to build wealth,wealth that has capacity to acquire,Any type of wealth that cannot match up with price changes whether seasonal or otherwise beats its own purpose... therefore the most prudent analysis would be one that uses overall inflation..... imagine investing your buffer cash using underlying inflation as the main fiscal pointer yet u want the same to give u the ability to live comfortably for a certain period of time (which is affected by seasonal commodity price changes) if u lose ur current income stream.... Thats my take.... Its just me whatever choice you make in life make sure that you can live with it.
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Kausha		#29 Posted : Monday, September 14, 2009 8:28:00 AM
Rank: Member Joined: 2/8/2007 Posts: 808		My two cts economics and street wisdom tells me that the underlying inflation is a creation of some political analyst meant to allow for a 'burry our head in the sand' moment. Inflation is inflation and it 's meant to measure the entire goods basket and that is what we should use to plan. Mind you Kenya is one of the very few countries in the world using this dubious underlying inflation metric on its radar. A 3rd world country like ours you would expect to have food as a key constituent of the inflation basket. If majority of the people earn less than a $ a day how do you expect them to spend on anything else,unless they have other means of sourcing food. Therefore if you are planning for growth this is a big worry because it impairs the purchasing ability of the majority of the consumers meaning you have to either push your price up by that number if you are a monopoly or oligopoly to cover your cost or adjust down for this number in your price if you are in competition.
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mukiha		#30 Posted : Monday, September 14, 2009 10:29:00 AM
Rank: Elder Joined: 6/27/2008 Posts: 4,114		@Ericks; the seasonal fluctuations of the overall inflation are just to erratic to form any basis for investment projections. This the reason it is actually more prudent to use the underlying values. You may start with 15% one month,then two months later the figure jumps to 33% ...and on the sixth month it is down to negative3%...just too erratic!! @kausha; a time must come when one has to stop being too untrusting of any figure coming from government institutions. When you write 'street wisdom tells me that the underlying inflation is a creation of some political analyst meant to allow for a 'burry our head in the sand' moment.' you make one wonder why the statistics bereau publishes both figures. If they wanted to understate the inflation,they would simply publish the underlying value...or better still,cook some figures!! True; very many Kenyans do live on less than 100-bob aday...but those in that category DO NOT INVEST!! They don't have spare cash to invest because the consume all their income.... For the rest of us with cash to invest,underlying inflation makes more sense because it is more predictable.....and after all,we don't invest for future consumption alone!! Having written all that; I must not lose sight of the fact that at any given moment,an investor wants an investment that will give the greatest returns....thus the question remains,THE BOND OR THE SHARE? Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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