NSE foreign investor weekly outflow hits new high of Sh1.7bn

The hopium language used in this article confirms that the index still has room to fall lower! Hope has never and will never be an investment strategy.

Aren't all the listed banks above the 5bn shareholder capital proposal?
Unless a few small banks list in an attempt to raise funds to make it to 5bn, why the M&A excitement?

Some banks are quite close to 5bn [by 2017] and 3 years of zero dividends can get them there. Most Kenyan banks easily make 10% ROE so a bank with 3.75bn shareholders funds (31 Dec 2014) can make it to 5bn with just 10% (per year) ROE with all earnings being retained.
3.75 x 1.1 = 4.13
4.13 x 1.1 = 4.54
4.54 x 1.1 = 5.08

Some banks have ROEs of 15% and that means a bank with 3.25bn Shareholder Funds [31 Dec 2014] could make it by 31 Dec 2017.

I suspect many small banks will revalue their properties or enter into sale-leaseback deals [so the asset realizes cash used to bolster Core Capital] or capitalize expenses [instead of running them through the P&L] ... instead of being forced into a M&A deal.

I expect a few Private Placements to bridge the difference/shortfall for those slightly short of the 5bn.

Are foreign banks interested in buying out Kenyan banks?
If yes, then there might be a floor. If no, then there is no floor.
Acquisitions are not easy. The lauded synergies hardly ever mature primarily due to cultural issues.

Focus!

And remember...

We have said, all along, that Stocks, commodities and real estate will ALL FALL.

The hard cash you have will have a bigger buying power.

Also, be prepared for a possibility of you lifetime savings being locked up in a banks vaults, like happening in GREECE now!

Prechter, my mentor, says the World's debts is UNPAYABLE!

Your own country has got a negative credit rating because of mounting debt.. Hmnh!

Hopefully this is my last post on wazua(I have hit my target of 1,000 posts) it's been a wonderful five years ladies n gents. I have learnt a lot and taught a lot.
Let me give my accolades to the following:
@Vituvingisana-for prompting me to join wazua. Back in 2009 at the height of the bear run he was the only one actively posting and he looked he was just talking to himself.Thanks for sharpening my mind on the agric stocks moto moto thread.

@deal-for making me lots of cash on uchumi and saving me cash on Britam. Bright young fellow, good analyst when he want to be one but he gives up too easily.

@Njung'e-for saving me mad cash on mumias. I would be crying in the toilet.

@guru267-for showing me you can play the market long-term and short-term. Her early posts and market posts were really admirable. She got lost somewhere hope you find your way home.

@sparkly-an excellent stock picker good insights into good stocks but you never follow through. @mwekezaji-also a good stock picker with a bright future.

@Aguytrying and @smutaga-for being brilliant students of fundamental analysis. A bit of technical analysis will not harm you.

@Hisah-for teaching me macro-economics and inverse relation of the dollar and the commodities prices. I impressed my bosses when I told them oil would collapse from $115 to below $60.

@mnandii-for helping me re-discover technical analysis. It has saved me a lot of headache, misery and money. Keep up the spirit

@madam admin-for bestowing the rank of veteran. It would have such a shame to go out as a member.

@everyone else-knives sharpen knives. Keep up the spirit

@guests- when will you ever join and contribute to knowledge. You can't drink from the well and refuse to replenish the well.

Kwa hayo machache ladies n gents mkonomtupu has left the site