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KenyaRe FY19 - FY23 (Both Inclusive)
Ericsson
#761 Posted : Tuesday, September 13, 2022 6:43:35 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,412
Location: NAIROBI
heri wrote:
Ericsson wrote:
VituVingiSana wrote:
My 2 cents wrote:
This monkey company!
So much cash and liquid assets and absolutely no imagination on how to leverage this to increase value. They should have bought the Coke building for instance, that was such a fantastic deal for Jubilee. They should at least increase their exposure to cheap blue chip equities.
Instead they are all in cash and government securities.
And they have been bleeding market share for a couple of years now.
Last I checked it was down to 16% (even with the mandatory 20% mandate that Kenyan insurers get re-insured by them). Meanwhile in their non-Kenyan markets several countries establishing local re-insurers that will take even more of their business.
This is a great candidate for government divesture. Should come down from the current 60% to say 30%. Then it stands a chance. Otherwise it will remain a rich monkey whose true value will forever remain unlocked.

1) Needs GoK to reduce its stake below a strategic investor eg Safaricom as an example

2) Fire most of the board and management

3) Stop writing poor business. I feel there is something shady about the brokers they use. Very high commissions and loss-making business.

4) Stop any plans to add more real estate esp by building another office building. This will be riddled with corruption. Yields are low given the empty office/commercial space in Upper Hill. Perhaps residential but not if KenyaRe is running the show. At best a JV with a solid developer.
The land they can build real estate has disputes in court e.g
-Kiambu road with Kenyatta kin
-Ngong road with Kenya Forest service
-Shanzu land with Kenya Prisons
JV will even be riddled with greater corruption than them going solo.
As for the Upper Hill they can commence construction once Anniversary towers and Kenya Re Towers attain full occupancy.

5) Buy cheap stocks. SCBK, ABSA, BAT etc have dividend yields of 9%+ with potential growth vs 8% or lower real estate yields.

True here the current management has closed their ears and eyes in making such moves.Their portfolio in stocks should be 10% of their assets.


Will our new government change the fortunes of these non performing entities like Kenya Re?


Let's wait and see first the new parastatal heads to know the direction.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
My 2 cents
#762 Posted : Tuesday, September 13, 2022 7:37:31 AM
Rank: Member


Joined: 6/2/2010
Posts: 893
Kenya-Re is one that lends itself to lots of abuse. The cash can be raided simply by having the company buy land at grossly over-valued prices. It is an asset rich company that seems to have no guiding strategy. And they are losing market share each year. The best thing that can ever happen to Kenya-Re is for the government to divest, from current 60% to less than 30%. Its value can be optimised as a non-parastatal.
Ericsson
#763 Posted : Tuesday, September 13, 2022 2:41:12 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,412
Location: NAIROBI
My 2 cents wrote:
Kenya-Re is one that lends itself to lots of abuse. The cash can be raided simply by having the company buy land at grossly over-valued prices. It is an asset rich company that seems to have no guiding strategy. And they are losing market share each year. The best thing that can ever happen to Kenya-Re is for the government to divest, from current 60% to less than 30%. Its value can be optimised as a non-parastatal.


Kenya Re hasn't bought any land since 2003 not unless something changes.
They are heavy on idle land bought during the Moi regime and some have court cases and disputes.
They should exit reinsurance in India asap
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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