KA-INVESTOR

• My Two Cents to Msee Wetu

  Posted: February 21, 2008, 12:38 pm by ka-investor

  From my previous post i got this visitor's question that I would like to share with you and the answer i gave. What do you think?
  His Question:
  
  Dear sir,
  
  I've been a regular of your blog and I've gained some very vital knowledge while here...to make the long story short I would kindly request your advice on two good buys (share) on the NSE, and your opinions as to why.
  Thank you.
  
  mseewetu@gmail.com
  
  My Answer:
  
  Hi Msee wetu,
  
  Thanks for leaving your comment on my blog. Regarding the question, I don't think it is wise to buy into shares right now since political instability in the country is quite unpredictable. However, if you so wish to make long term buy I would advice you to go for the following shares:
  
  1. Stan chart
  I expect them to give out good dividend when they announce 2007 results. This is a strong company that banks on experience and efficiency.
  
  2. KCB (watch the rights issue)
  With an extensive branch network and investment in latest technologies across the East African region, this banks growth prospects look promising. They also have a very strong marketing strategy that sets them a head of the rest. They are planning to have a rights issue soon and you can get gain a bit from the price rally occasioned by it. I suspect they will announce good dividends coupled with a bonus issue when they give out their end year results, to sweeten the rights issue (remember NIC bank)
  
  3. KQ (very long term)
  I suggest this since it’s a strong counter that has received some battering of late. Their operating cost is high due to the increasing prices on the international market, there has been an increase in competition from international airlines and tourism which is their main source of revenue is badly affected by the effects of post election violence. Adding the resignations of their two directors, many people are off-loading them now to avoid further losses so you can get them at a bargain - less than Ksh.45. I would advice you to get this as a long term counter, 5 to 10 year. But eventually it will pay back well.
  
  Several companies will soon be releasing their end year results and most of them are likely to post good profits for 2007. You can also buy in the depressed counter that you anticipate will perform well for short term gains from speculators (not a very good idea…it makes you a speculator too). The finance and banking sector had a very good year last year so check out this counters - specifically banks. Also consider companies in the construction sector that is likely to boom soon if the political stalemate is resolved (think Athi River and Bamburi)
  
  Disclaimer: These are my personal opinions and should not be taken as statements of fact. Please consult your broker or investment advisor before making any transactions.
  
  Thanks & regards,
  
  Kainvestor
  kainvestor@gmail.com

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