Treasury to raise domestic debt by 75pc next year

Kenya’s domestic borrowing is projected to rise by 75 per cent to Sh208 billion in the next financial year compared to the current year, energizing the fixed-income market but also raising the spectre of even higher interest rates. The National Treasury is projected to raise domestic debt to Sh208 billion in the next financial year. Higher domestic borrowing— at more than Sh100 billion annually for over the past five years—has been blamed for the rising lending rates. Experts have warned of the need for the government to reduce borrowing and to keep a firm grip on spending [...]

Citigroup sees KCB share price taking a hit

A new report by Citigroup’s investment banking arm indicates that the share price of KCB Group, Kenya’s largest bank by assets, will directly depend on how the economy performs over the next few months. The investment bank said its target price for the KCB stock is Sh53 which is below Thursday’s Sh59 closing price. Citi said that since slightly over 80 per cent of the bank’s revenues come from its local operations, Kenya’s general economic performance has a direct relationship with the group’s performance [...]

Moody’s urges African banks to cut bad loans

Regional and pan-African banks could lend more if they reduced their stock of bad loans and got additional funding from shareholders. Ratings agency Moody’s said that these two factors were limiting the ability of African Export-Import Bank (Afreximbank), East African Development Bank (EADB), PTA Bank and Shelter-Afrique to lend more [...]

World Bank paints rosy economic forecast for Kenya as oil price dips

The World Bank has indicated that the Kenyan economy is set to grow by six per cent this year, riding on infrastructure developments and low oil prices. World Bank said the Kenyan economy grew by 5.4 per cent last year against its estimate of 4.7 per cent in January. However, the Bretton Woods institution warned of over-reliance on government spending in driving the economy [...]

Inefficient, large companies slow manufacturing

World Bank data shows that the gap in labour productivity between an employee in the most efficient company and the least efficient within the same sector was as wide as Sh22,000 annually. Lack of competition in Kenya has seen inefficient large manufacturers remain in the market leading to high cost of goods and slow growth of the sector [...]

Local manufacturers losing EAC market to China firms

Kenyan manufacturers are losing the East African market to Chinese and Indian firms. The World Bank said the share of manufactured goods imported by East African Community (EAC) countries from Kenya declined to seven per cent in 2013 from nine per cent four years earlier. These changes are significant because almost 40 per cent of Kenya’s manufacturing exports go to the EAC [...]

Bamburi profit up 6.2pc on high cement demand

Cement maker Bamburi's  net profit for the financial year ended December rose 6.2 per cent on the back of increased demand for its products in the regional market. This came as sales increased by a similar margin to Sh36 billion, up from Sh33.9 billion. The turnover increase (was) mainly as a result of improved market conditions in Uganda, growth in the Kenyan market, in particular in the infrastructure segment in the latter part of the year, with commencement of key government projects and growth in the contractor segment, especially value added products [...]

Carbacid in 6pc profit drop on lower exports

Industrial gases manufacturer Carbacid has reported a six per cent drop in net profit to Sh221.2 million for the six months ended January. The Nairobi Securities Exchange-listed firm’s revenue decreased 15.4 per cent to Sh410.2 million from Sh473.7 million recorded during a similar period last year, representing a 16 per cent decrease. The company’s reduced profitability and sales were a result of lower carbon dioxide exports, increased operating costs and mining [...]