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South Africa-based school launches in Tatu City

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South Africa-based school launches in Tatu City

South Africa’s private education firm AdvTech will Friday officially open a school in Kiambu’s Tatu City under its Crawford Schools brand, marking its continued expansion into the East African market.

Crawford School will teach the Cambridge curriculum and targets learners from kindergarten to A-levels.

Last year, the Johannesburg Stock Exchange-listed firm acquired Makini Schools in a deal, which saw founder Mary Okello earn about Sh930 million from the sale of a 71 per cent stake in her high-end group of eight schools to UK-based investor Scholé Limited and Advtech.

“Crawford International School Nairobi has a capacity for 1,700 students and is part of South Africa’s JSE-listed ADvTECH Group, Africa’s largest private education provider. The group also recently acquired the Makini Group of Schools in Nairobi and Kisumu, marking the start of a five-year expansion strategy in the East African region,” said Crawford in a statement.

The new Makini School owners reckon they would expand the institution beyond its eight schools in Nairobi and Kisumu, underlining foreign investor interest in Kenya’s high-end education.

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Scholé Limited said it anticipated that the school fees for Makini Schools would increase thanks to inflation and operation costs as they further develop the facilities.

Makini charges more than Sh80,000 a term for its Nairobi schools and up to Sh45,000 at the Kisumu unit.

Tuition for Crawford ranges from Sh410,000 at kindergarten to Sh950,000 for senior high school students.

The last year saw increased investment in premium education, with businesses seeking to cash in on rich and middle-class parents’ interest in quality education as well as woo parents working for global institutions and foreign governments.

Brookhouse Schools opened a new branch in Runda in 2017. Centum-owned Sabis International School in Runda welcomed its first batch of 100 students in September last year.



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WHO warns of ‘second peak’ in areas where COVID-19 declining

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WHO warns of ‘second peak’ in areas where COVID-19 declining

Mike Ryan, Executive Director of the World Health Organisation (WHO)
Mike Ryan, Executive Director of the World Health Organisation (WHO), attends a news conference at the United Nations in Geneva, Switzerland May 3, 2019. FILE PHOTO | REUTERS 

Countries where coronavirus infections are declining could still face an “immediate second peak” if they let up too soon on measures to halt the outbreak, the World Health Organization said on Monday.

The world is still in the middle of the first wave of the coronavirus outbreak, WHO emergencies head Dr Mike Ryan told an online briefing, noting that while cases are declining in many countries they are still increasing in Central and South America, South Asia and Africa.

Ryan said epidemics often come in waves, which means that outbreaks could come back later this year in places where the first wave has subsided. There was also a chance that infection rates could rise again more quickly if measures to halt the first wave were lifted too soon.

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“When we speak about a second wave classically what we often mean is there will be a first wave of the disease by itself, and then it recurs months later. And that may be a reality for many countries in a number of months’ time,” Ryan said.

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“But we need also to be cognizant of the fact that the disease can jump up at any time. We cannot make assumptions that just because the disease is on the way down now it is going to keep going down and we are get a number of months to get ready for a second wave. We may get a second peak in this wave.”

He said countries in Europe and North America should “continue to put in place the public health and social measures, the surveillance measures, the testing measures and a comprehensive strategy to ensure that we continue on a downwards trajectory and we don’t have an immediate second peak.”

Many European countries and US states have taken steps in recent weeks to lift lockdown measures that curbed the spread of the disease but caused severe harm to economies.

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Equity withdraws proposed dividend declaration and payment due to market uncertainty

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NAIROBI, Kenya, May 26 – The Board of Directors of Equity Group Holdings Plc, the largest bank on the Nairobi Securities Exchange by market capitalization, has withdrawn its recommendation of a Ksh. 9.5 billion dividend payout to its shareholders.

The withdrawal of the dividend payout speaks to the Board’s assessment of risk, post balance sheet date of December 31, 2019 and of the Group’s approach to prudent risk mitigation and management.

The COVID-19 global health pandemic has led to a great lockdown which has induced a complex and multi-faceted global crisis of health, economic, and social challenges of an unprecedented magnitude.

The pandemic’s effects have created a significant drop in the global GDP, and a substantial loss of employment leading to an economic recession which economists are projecting will evolve into a global depression worse than the Great Depression of the 1930’s. The global economic outlook has worsened considerably since the beginning of the year.

The United Kingdom has entered a severe recession last experienced in the 17th Century, while the United States unemployment rate is expected to reach 25% by the end of 2020 with 39.6 million people already unemployed. The most recent global growth projections from the International Monetary Fund (IMF) have revised the global economic outlook to below the 2.9% achieved in 2019 from an initial projection of 3.3% to -3.0% (negative 3.0%) of GDP growth rate, which they feel is optimistic.

Cautiously, the IMF also projects that if the pandemic fades in the second half of 2020 and if policy actions taken around the world are effective in preventing widespread bankruptcies, extended job losses, and system-wide financial strains, global growth could rebound to 5.8% in 2021.

“The Equity Group Holdings Board took a conservative approach that recognizes the emerging unquantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertainty,” said Dr. James Mwangi, the Group CEO and Managing Director. He added that, “A strong capital and liquidity position gives us the strength and capacity to cushion our business and accommodate and walk with our customers during these challenging times”.

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Further, the Board would like to encourage the Bank’s customers to seek opportunities to innovate in the age of the pandemic, and to keep looking for growth possibilities even in this trying time in order to preserve cash and capital, and to not just survive the crisis but to be ready to thrive in the New Normal.

By withdrawing the recommendation for a dividend payout the Board is exercising financial prudence so as to conserve cash to enable the Group to respond appropriately to the unfolding crisis in terms of supporting its customers, and to be able to direct cash resources to potential opportunities that may arise as economies in which Equity Group Holdings operates begin to recover.

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“If the economic crisis mutates into a financial crisis, Equity Group will be well placed to weather the challenge with a strong capital base, strong liquidity and an agile balance sheet that improves its leverage, and would allow the financial services group to shield and accommodate its customers throughout this period of uncertainty,“ said Dr. Mwangi.

He added, “However, should the crisis not play out as anticipated, the Board will explore various options and make suitable recommendations that will enhance shareholder value.”

With this approach, the Group leadership and management can focus on strategically positioning the business, in order to protect and preserve its customer base through loan accommodations and rescheduling/restructuring to enable them to go through the prevailing turbulence while at the same time preserving cash to shore up the financial revival and growth of its customers’ businesses post the COVID-19 crisis.

The Board continues to evaluate the potential impact of the pandemic on the Group and to formulate and implement strategic plans to mitigate any effects, and will, in the usual manner ensure that it keeps the shareholders and other stakeholders informed.

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Listed blue-chip firms defy Covid to grow NSE wealth

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Listed blue-chip firms defy Covid to grow NSE wealth

Nairobi Securities Exchange
The Nairobi Securities Exchange. FILE PHOTO | NMG 

The share prices of select blue-chip stocks at the Nairobi bourse have gone up since Kenya imposed a dusk-to-dawn curfew over Covid-19 that has hit businesses, underlining the diverging stock market and household fortunes.

Since March 25, when the nationwide curfew was imposed, the Nairobi Securities Exchange (NSE) has been on the rise, adding Sh254 billion to shareholders’ wealth.

This has made the NSE one of the few places to make money in an economic environment that has seen plunging corporate sales, unpaid staff leaves as well as salary and job cuts.

Safaricom #ticker:SCOM, KCB Group #ticker:KCB, Equity Group #ticker:EQTY and East African Breweries Limited (EABL) #ticker:EABL accounted for more than 80 percent of the paper wealth gain over the period, underlining the impact of the four counters in shaping the performance of the bourse.

The four firms had also accounted for about 72 percent of the paper wealth erosion when the bourse hit its lowest level in mid-March as the spread of the coronavirus and other economic headwinds sparked an exit of foreign investors.

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The stock gains are the product of investors seeking to buy shares at a bargain, hoping for outsized capital gains when the stock market recovers.

By Friday, the value of all the stocks on the bourse stood at Sh2.146 trillion, compared to Sh1.89 trillion on March 25. However, they remained below the Sh2.6 trillion peak of January 10.

Separate reports released earlier this week by the Kenya National Bureau of Statistics (KNBS) and the Kenya Association of Manufacturers (KAM) have painted a gloomy picture in the financial health of households and companies.

A half of the households surveyed by KNBS reported that they were either unable to pay their rent or had barely managed to make partial payments, citing reduced incomes, temporary job losses and delay in income as some of the reasons.

Manufacturers have also said that 79 percent of them were facing financial constraints, while 69 percent admitted that they were struggling to pay their employees.

The World Bank forecasts that Kenya’s economic growth will slow down to 1.5 percent this year, and contract one percent in the worst-case scenario as the restrictions to stop Coronavirus sap demand from trading partners like Europe, and disrupt both supply chains and domestic production.

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Analysts say that this divergence reflects a market that is largely driven by services firms, in contrast to the fact that majority of Kenyans are employed in the agriculture, SME and informal sectors which have borne the brunt of the restriction measures put in place to contain Covid-19.

“The highest weighting on the NSE is services companies like Safaricom and banks, which is not a reflection of the economy that is largely agrarian,” said Stanbic regional economist for Eastern Africa Jibran Qureishi.

In the Kenyan economy, job losses and pay cuts have become a common feature for many companies that are struggling to find business, with the repercussions being felt from the beginning of April.

Motor vehicle assemblers for instance reported that new unit sales fell by almost half last month to 594 compared to 1,127 sold in the same month last year.

The virus has also caused a drop in power consumption. Usage fell by 13.2 percent or 129.5 million units last month to a 32-month low of 848.6 million kWh, a result of lower consumer demand and firms and industries cutting back on their operations. “The regulations put in place have resulted in shut down of industries and massive job losses. Fear looms of an economic recession with far greater magnitude than the 2008/2009 global financial crisis,” said KAM in its survey conducted jointly with consultancy firm KPMG.

Since March 25, Safaricom has seen its market valuation increase 20 percent or Sh196.3 billion, while Equity Bank is up 11.1 percent or Sh13.5 billion. EABL has gained 10.7 percent or Sh12.4 billion in the period. KCB and Co-operative Bank are up 7.1 per cent and four percent respectively, equivalent to market cap gains of Sh7.7 billion and Sh2.6 billion.

These firms are the five largest and most liquid at the bourse, accounting for 75 percent of the NSE’s total market cap. Shares are also more in tune with the global investor sentiment, due to the influence of foreign investors.

“Equities will largely be driven by valuations on a comparative basis against markets such as Egypt and Nigeria for sub-Saharan Africa, and mirror global risk sentiments, hence these divergences with the rest of the economy,” said Mr Qureishi.

A similar divergence of the markets and the economy has been seen on Wall Street, as the American stock market is commonly referred to, which is enjoying gains that have been backed by renewed bond buying by the US Federal Reserve.

The S&P 500 is trading at a two-month high, and the Nasdaq a three-month high, backed mainly by gains on tech giants like Amazon, Google, Microsoft, Facebook and Apple, which are deemed by investors to have a good chance of weathering the Covid disruptions.

Meanwhile, unemployment in the US has gone up from pre-Covid levels of four to 16 percent, the worst it has been since the Great Depression of the 1930s.

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