Business News Highlights

KQ experiences flight disruptions as technicians fail to report to work

Kenya Airways (KQ) is experiencing some disruptions to its flight schedules after an undisclosed number of technicians failed to show up for work, the national carrier said in a statement issued this morning. The interruptions are the latest in a series of setbacks that the airline has been facing in recent months, including having suffered a Sh26.2 billion net loss for the year ended March 2016.

The carrier noted that its employees are working to reduce the disruptions, adding that that nine flights out of Nairobi had been affected, including  flights KQ650/480/782/576//400/572/434/350/520, which were rescheduled. KQ, which halved its pre-tax loss to Sh5 billion in October ahead of a planned pilots’ strike, saw its former executive, Mbuvi Ngunze, announce his resignation from the lossmaking airline in November.

Businesses, consumers fall on hard times as non-performing loans jump by Sh17 billion

The number of non-performing loans has jumped by Sh17 billion between June and September as businesses and consumers fail to make good on their debts, third quarter statistics from the country’s banking sector have shown. Commercial banks have revealed that the number of bad loans hit Sh207 billion as a drop in household incomes affected peoples’ purchasing power.

Heavy job cuts by firms struggling to cushion their profit margins have forced many households to default on their loans in order to focus their earnings on basic needs. The Central Bank said in one of its latest Credit Survey Reports that the increase in gross non-performing loans was mainly due to challenges in the business environment that led to cash-flow constraints for borrowers.

Kenya’s private sector growth rebounds in November as rate of job creation remains solid   

Kenya’s private sector firms reported solid improvement in business conditions during the month of November after having seen growth ease to a four-month low at the start of the fourth quarter, a Purchasing Managers’ Index (PMI) survey released today by Stanbic Bank and HIS Markit has revealed. The seasonally adjusted PMI (an indicator of the economic health of the manufacturing sector) rebounded to 53.3 in November, up from October’s four-month low of 52.0. A PMI of more than 50 represents expansion of the manufacturing sector when compared to the previous month. A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change.

The latest figure was broadly in line with the average seen over the third quarter (53.4), although remained below the overall series trend (54.6). Contributing to growth of the sector as a whole was a sharp expansion in new work. Jibran Qureishi, Regional Economist for East Africa at Stanbic Bank said that faced with mounting capacity pressures, a number of firms chose to hire additional staff adding that the rate of job creation was solid overall.

Japanese firm to set up shop in Kenya following Sh100 million investment deal

Leading Japanese Consumer Healthcare Company, Rohto Mentholatum Group, is set to tomorrow launch its operations in Kenya as it seeks to branch into the larger Eastern Africa region. Through an initial investment of over Sh100 million, the company will be headquartered in Nairobi with a view of providing strategic services in the healthcare and cosmetic sectors in the region.

The launch of Rohto Mentholatum Kenya and the unveiling of its ROOTIA range of products comes in the wake of increased Japanese investments in Kenya, leveraging the long-term relationship that the countries have enjoyed over the past many years. The development also underscores Japan’s commitment to an earlier $30 billion (Sh3 trillion) investment pledge to transform Africa that was made during the Tokyo International Conference on African Development (TICAD) conference last August.

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