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EABL half year 2019/2020 results
Queen
#61 Posted : Thursday, October 07, 2021 1:42:33 PM
Rank: Member


Joined: 11/21/2018
Posts: 477
Location: Britain
Ericsson wrote:
VituVingiSana wrote:
Absa breaches lending law in Sh18.8bn loan to EABL
https://www.businessdail...8bn-loan-to-eabl-3575148

They need 11bn to pay off an 11bn loan coming due in July 2022.


Their cashflow position not good.


The share price responding accordingly.
My 2 cents
#62 Posted : Thursday, October 07, 2021 8:35:05 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
Will this company ever wean itself off debt?
My 2 cents
#63 Posted : Thursday, October 07, 2021 8:53:21 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
Most expensive share in the NSE on a PE basis (30). I wonder why people are willing to buy EABL when better value can be found in other shares.
Ericsson
#64 Posted : Thursday, October 07, 2021 10:14:25 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
My 2 cents wrote:
Most expensive share in the NSE on a PE basis (30). I wonder why people are willing to buy EABL when better value can be found in other shares.


They like its products
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Ericsson
#65 Posted : Thursday, October 07, 2021 10:45:21 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
My 2 cents wrote:
Will this company ever wean itself off debt?


When the Kenyan economy and their sales starts growing double digits with no hikes in taxes and levies for EABL products
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Ericsson
#66 Posted : Thursday, October 07, 2021 10:50:28 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
VituVingiSana wrote:
Absa breaches lending law in Sh18.8bn loan to EABL
https://www.businessdail...8bn-loan-to-eabl-3575148

They need 11bn to pay off an 11bn loan coming due in July 2022.


The ksh.11bn to be paid off;part of it was used to retire the ksh.6 billion medium term note which they were repaying at an interest of 14.95% and the remainder to acquire the additional 30% stake in Serengeti Breweries
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
My 2 cents
#67 Posted : Friday, October 08, 2021 10:20:22 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
Why lend to EABL at 12% when you can lend the government at 13%? Ours is a strange market.
Ericsson
#68 Posted : Saturday, October 09, 2021 8:10:24 AM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
My 2 cents wrote:
Why lend to EABL at 12% when you can lend the government at 13%? Ours is a strange market.


5 year government bond at 13%?
Show us one.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
My 2 cents
#69 Posted : Saturday, October 09, 2021 11:52:33 AM
Rank: Member


Joined: 6/2/2010
Posts: 637
One can buy the 20 year bond, and then sell it after 5 years with little erosion on yield. And bear in mind the infrastucture 20 year bond is a 13% tax free while the yield on EABL one after tax is 10.2%
VituVingiSana
#70 Posted : Sunday, October 10, 2021 3:57:07 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,594
Location: Nairobi
My 2 cents wrote:
One can buy the 20 year bond, and then sell it after 5 years with little erosion on yield. No guarantees over the next 5 years on yields. If the yields rise then there could be loss on the principal whereas EABL will pay 100%
And bear in mind the infrastucture 20 year bond is a 13% tax free while the yield on EABL one after tax is 10.2% Good point on taxes but can you buy the IFB at 13%? Pricing I have has it at 12.5% at the most

Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
My 2 cents
#71 Posted : Sunday, October 10, 2021 7:24:00 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
VituVingiSana wrote:
My 2 cents wrote:
One can buy the 20 year bond, and then sell it after 5 years with little erosion on yield. No guarantees over the next 5 years on yields. If the yields rise then there could be loss on the principal whereas EABL will pay 100%
And bear in mind the infrastucture 20 year bond is a 13% tax free while the yield on EABL one after tax is 10.2% Good point on taxes but can you buy the IFB at 13%? Pricing I have has it at 12.5% at the most



The latest IFB yields a tax free 12.7%. Bond prices fall if yields rise, there is little likelihood of the interest rate rising above 12.7% in the next 5 years given the liquidity in the market – bank lending to the government has ramped up as they try to minimize risk.
12.7% interest free lent to the government is much superior to 10.2% lent to a corporate that cant seem to wean itself off debt.
Ericsson
#72 Posted : Monday, October 11, 2021 12:58:38 AM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
https://www.businessdail...st-its-liquidity-3579148
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
VituVingiSana
#73 Posted : Monday, October 11, 2021 1:04:39 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,594
Location: Nairobi
My 2 cents wrote:
VituVingiSana wrote:
My 2 cents wrote:
One can buy the 20 year bond, and then sell it after 5 years with little erosion on yield. No guarantees over the next 5 years on yields. If the yields rise then there could be loss on the principal whereas EABL will pay 100%
And bear in mind the infrastucture 20 year bond is a 13% tax free while the yield on EABL one after tax is 10.2% Good point on taxes but can you buy the IFB at 13%? Pricing I have has it at 12.5% at the most



The latest IFB yields a tax free 12.7%. Bond prices fall if yields rise, there is little likelihood of the interest rate rising above 12.7% in the next 5 years given the liquidity in the marketNever say never. Fiscal mismanagement is mega. BTW, did you read how Zambia found an additional $2.2bn of debt? – bank lending to the government has ramped up as they try to minimize risk.
12.7% interest free lent to the government is much superior to 10.2% lent to a corporate that cant seem to wean itself off debt.
And is GoK weaning itself of debt? Laughing out loudly
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Angelica _ann
#74 Posted : Monday, October 11, 2021 1:29:46 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,864
Tbills and Tbond rates (plus Kshs. Fx rate) are where they are because of stubbornness of Opus Dei towards Treasury & Executive demands.
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
My 2 cents
#75 Posted : Monday, October 11, 2021 5:01:52 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
VituVingiSana wrote:
My 2 cents wrote:
VituVingiSana wrote:
My 2 cents wrote:
One can buy the 20 year bond, and then sell it after 5 years with little erosion on yield. No guarantees over the next 5 years on yields. If the yields rise then there could be loss on the principal whereas EABL will pay 100%
And bear in mind the infrastucture 20 year bond is a 13% tax free while the yield on EABL one after tax is 10.2% Good point on taxes but can you buy the IFB at 13%? Pricing I have has it at 12.5% at the most



The latest IFB yields a tax free 12.7%. Bond prices fall if yields rise, there is little likelihood of the interest rate rising above 12.7% in the next 5 years given the liquidity in the marketNever say never. Fiscal mismanagement is mega. BTW, did you read how Zambia found an additional $2.2bn of debt? – bank lending to the government has ramped up as they try to minimize risk.
12.7% interest free lent to the government is much superior to 10.2% lent to a corporate that cant seem to wean itself off debt.
And is GoK weaning itself of debt? Laughing out loudly


Government cant simply print or tax us to smithereens to repay their debt. EABL does not have this option.
My 2 cents
#76 Posted : Monday, October 11, 2021 5:03:30 PM
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Joined: 6/2/2010
Posts: 637
I mean government can print money and tax....
Ericsson
#77 Posted : Monday, October 11, 2021 6:32:57 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
My 2 cents wrote:
I mean government can print money and tax....


Printing money 💵 has serious ramifications.
The additional tax measures they are coming up with,are they hitting the targets in terms of collections.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
My 2 cents
#78 Posted : Monday, October 11, 2021 8:05:16 PM
Rank: Member


Joined: 6/2/2010
Posts: 637
The demerits of printing money aside; the argument is that you get a higher and risk free yield from the government IFB bond as compared to the EABL commercial paper.
Ericsson
#79 Posted : Monday, October 11, 2021 9:00:26 PM
Rank: Elder


Joined: 12/4/2009
Posts: 9,934
Location: NAIROBI
My 2 cents wrote:
The demerits of printing money aside; the argument is that you get a higher and risk free yield from the government IFB bond as compared to the EABL commercial paper.


Probability of EABL defaulting in interest payments and principal repayments is zero
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
VituVingiSana
#80 Posted : Tuesday, October 12, 2021 9:01:51 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,594
Location: Nairobi
Ericsson wrote:
My 2 cents wrote:
The demerits of printing money aside; the argument is that you get a higher and risk free yield from the government IFB bond as compared to the EABL commercial paper.


Probability of EABL defaulting in interest payments and principal repayments is zero
There is nothing for sure but death and taxes.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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