EABL half year results 2006 (Sh.148.00)

On Feb 23 EABL will reveal its 6 months (Jul-Dec 06) performance after the close of trading. I expect the numbers to be quite interesting and if the market pays attention should push the share price higher. Two things in my mind strike me as important:

1. Like it or not this government has placed significant emphasis on shoring up our rural economy. If you assume 60% of the population is to be found here, then any efforts in this regard will only be music to mass market companies. Rural farmer incomes have been improved through price support mechanisms and market guarantees. Add to that the subsidy provided to these families through free primary school education (and there is talk of extending it to secondary schools now). You can thus start to see the case of higher disposable incomes across the country. Remember Safaricom stated that the record profit announced recently was achieved thanks to increased new connections in the rural area? I think EABL is benefiting from this same factors and volumes in Kenya particularly must have seen some lift.
2. Another factor is a tax reduction on unmalted beer announced at last year's budget. The bottom line effect was to reduce the retail price per bottle of beer to the same as a bottle of coke. Now imagine how many of our rural folk would be enjoying a bottle of Citizen or Senator instead of Chang'aa? Combine this factor with the improved disposable incomes.

Well on the afternoon of 23 Feb, after the exchange stops trading we shall finally know. Methinks there is still a growth story here and we are still in the early days of an extended period of growth.

Comments

[Helen Ngamini]

Hi i av gone thru yua page an my its really wonderful.You seem to kind of have a vision for the kenyan stock market.However i think that yua vision is only possible if more and more people are educated about securities and how they can confide in them as investments.I think around only a 1/4 of kenya's population knows about shares .I think yu and others hu share yua vision ,ought to launch a campgain to tell kenyans what they should be knowing and they don't.