It will be a year full of equity market activities

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THE PLANNER

By PATRICK GITHINJI
This year, equity market activities are set to increase significantly compared to last year.
This will be as a result of expected public offerings by several companies.
Among the companies set to shed their stakes include National Bank of Kenya (NBK), Consolidated Bank of Kenya, KenGen and five sugar companies, while Co-operative Insurance Company is set to sell its stake to the public in 2013.
According to sources, the Government plans to unleash its 51 per cent stake to public in NBK this year.
As part of the preparation, the bank’s board recently renewed the contract of the Managing Director Reuben Marambii for two years.
According to Aly Khan Satchu, Mr Marambii’s contract is an indication that the board has trust in him.
"He will use his robust experience to prepare the institution for privatisation," he said.
The managing director has helped turn-around the bank’s losses over the years, putting it back on the profit trajectory.
Raising capital
In the nine months to September, the bank made a net income of Sh1.35 billion compared to Sh972 million a year earlier, driven by a growth in lending that rose by Sh5 billion to reach Sh17 billion.
However, the Government will have to offload its stake at Consolidated Bank of Kenya.
"We are on course to privatise the bank but we still have a few things being examined by a consultant and establish what we really want from the privatisation. The raising of capital will either be by an initial public offering contribution or floatation of a bond in the open market," said the bank’s chairperson Eunice Kagane.
At the first half of the year that ended June last year, the bank posted 145 per cent increase in pre-tax profits on increased lending buoyed by the ongoing recovery of the economy.
Profits rose to Sh 81.4 million compared to Sh 33.2 million in the same period last year.
After a delayed privatisation of the five sugar factories, the action is set to resume mid next year. According to industry sources, "everything" has been completed.
This will be a relief to stakeholders as the process has been in limbo since 2007.