In response to the performance of our PesaPortfolio over the course of last week, we have decided to make the following changes to the portfolio:
Mumias Sugar Company: we will continue to hold all our 2700 shares in the company. This is because we believe that the share is undervalued and has the potential to increase actively. We will hold it for the foreseeable future and consider making changes to our investment later.
KCB: we sold half of our holdings in KCB generating KES 11,518.75 in proceeds. The transaction is summarised below:
500 x 23.75 = KES 11,875
Actual proceeds = KES 11,875 x 0.97 (to remove the transaction cost) = KES 11,518.75
We decided to continue holding this stock, albeit less of it, because management at the bank has purchased shares in the company itself. This is an indication that they have confidence in the share and this may have a bearing of investor demand for the share thereby pushing the share price higher.
Housing Finance: we will continue holding our stock in this company because over the duration of investment the counter has been performing well. Its value has increased from KES 15.60 when we constructed the portfolio to KES 16.30 on Friday.
Kenya Reinsurance: the share has continued to perform well over the course of the last one week. We continue to hold our stock as we anticipate positive performance this week.
KenGen: we have decided to sell about half of our shares in the company. This sale generated KES 5,390.775. The transaction is summarised below:
600 x 8.55 = KES 5,130
Actual proceeds = KES 5,130 x 0.97 (to remove the transaction cost) = KES 4,976.10
We continue to hold 700 shares in the company so as to benefit from whatever gains the share will make over the course of the week.
Crown Berger: we continue to hold our shares in the company.
Barclays Bank of Kenya: we purchased 800 shares worth KES 11,080. This is because the share was among the best performing in last week’s trading. In addition to that management at the bank has purchased shares in the company itself. This is an indication that they have confidence in the share and this may have a bearing of investor demand for the share thereby pushing the share price higher. The transaction is summarised below:
800 x 13.85 = KES 11,080
Actual cost (includes transaction costs) = 1.03 x 11,080 = KES 11,412.40
Uchumi Supermarkets Limited: we purchased 200 shares in the company because the counter has exhibited a steady increase in value over the last two months. On Friday the share closed at KES 18, the highest the share has closed in six years. We expect this trend to continue this week. The transaction is summarised below:
200 x 18 = KES 3,600
Actual cost (includes transaction costs) = 1.03 x 3,600 = KES 3,708
The sales and purchases did not offset each other and we were left with KES 1,360 at hand.
Total Sales = 11,518.75 + 4,976.10 = KES 16,494.85
Total purchases = 11,412.40 + 3,708 = KES 15,120.40
Balance (Cash) = 16,494.85 – 15,120.40 = KES 1,374.45
The changes to the PesaPotfolio are summarised below:
| Actual Transactions | ||||||
| Share | Units | Transaction | Price (KES) as at 18th May 2012 | Proceeds from Sale | Net Value (Proceeds less taxes payable) | |
| KCB | 500.00 | Sold | 23.75 | 11,875.00 | 11,518.75 | |
| KenGen | 600.00 | Sold | 8.55 | 5,130.00 | 4,976.10 | |
| Cost of Purchase | Value of Shares | |||||
| Barclays Bank of Kenya | 800.00 | Bought | 13.85 | 11,412.40 | 11,080.00 | |
| Uchumi supermarkets | 200.00 | Bought | 18.00 | 3,708.00 | 3,600.00 | |
| Cash (Net Proceeds less Cost of Purchase) | 1,374.45 | |||||
The PesaPortfolio now looks as follows:
| Price (KES) as at Friday 18th May 2012 | Portfolio Value (KES) | |||
| Share | Market Segment | Units | ||
| Mumias Sugar Company | Manufacturing and allied | 2,700.00 | 5.55 | 14,985.00 |
| Barclays Bank of Kenya | Banking | 800.00 | 13.85 | 11,080.00 |
| KCB | Banking | 500.00 | 23.75 | 11,875.00 |
| Housing Finance Company Limited | Banking | 1,100.00 | 16.30 | 17,930.00 |
| Kenya Re-Insurance Corporation Limited | Insurance | 1,200.00 | 13.10 | 15,720.00 |
| Kengen Limited | Energy and petroleum | 700.00 | 8.55 | 5,985.00 |
| Crown Berger Limited | Construction and allied | 600.00 | 26.00 | 15,600.00 |
| Uchumi Supermarkets Limited | Commercial and Services | 200.00 | 18.00 | 3,600.00 |
| Net value of portfolio | 96,775.00 | |||
| Cash at hand | 1,374.45 | |||
| Cash receivable upon immediate sale (less transaction costs) + Cash at hand | 95,246.20 |
We will observe the way in which our new portfolio will perform in the days to come.