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Daily Market Note Bloomberg: GNCP <GO>
www.genghis-capital.com 6
th November 2012
2011
Equities
Market Correction Pushes the NSE Lower....
The NSE 20 Share Index shed another 10.57 points to 4113.96 as the overbought market position was being corrected. The
NASI was also down 0.09% however the FTSE 15 and FTSE 25 both gained by 0.22% and 0.21% respectively. Equity turnover
was still on a decline to Ke.314Mn. Bond turnover improved to Kes.2.1Bn with Sell/Buy back transactions still dominating the
bond trading activities. Foreign investor’s improved their participation with a contribution of 40% to market activity and a
long position of Kes.62.34Mn. Market capitalisation was relatively stable above Kes.1.2Tn. Kenya Airways only posted a 4%
decrease in share price to a VWAP of Kes.12.00 despite posting a 60% decline in gross profit for its half year results.
The single greatest edge an investor can have is a long-term orientation.”- Seth Klarman
The highlights of the day’s trading activity are listed below:
Table 1: NSE Performance Table 2: NSE Indices
Market Indices Summary
Index Yesterday Today % change
NASI 91.44 91.36 -0.09%
NSE 20 Share 4124.53 4113.96 -0.26%
FTSE NSE 15 122.14 122.41 0.22%
FTSE NSE 25 124.76 125.02 0.21%
Source: NSE
The Advance/Decline ratio at the close of today’s trading
session stood at 16/15 with 16stocks advancing in price and 15
shedding prices.
Foreign investor participation was slightly higher at 40% in
today’s trading compared t0 36% at the close of Monday’s
session.
Today’s session resulted in a net inflow of Kes.62.34Mn
compared to a net outflow of Kes.14.2Mn at the close of the
previous trading session.
The highest foreign investor turnover was recorded on Equity
Bank Ltd (NSE: EQTY)–Kes.59Mn and East African Breweries
Ltd (NSE: EABL)–Kes.28.3Mn. The 2 counters accounted for
27.82% and 69% of the total NSE and total foreign activity
respectively.
East African Breweries Ltd (NSE: EABL) recorded the highest
net inflow for the second day running, registering
Kes.56.76Mn.
The highest net outflow was recorded on Jubilee Insurance Co.
Ltd (NSE: JUB) at Kes.4.25Mn.
Top Traders
Equity Volume
Equity Bank Ltd 2,809,700
KenolKobil Ltd 2,342,600
Kenya Commercial Bank Ltd 1,560,600
Barclays Bank Ltd 1,434,800
Safaricom Ltd 1,414,000
Gaining Stocks
Equity Price (KES) % Change
Car & General (K) Ltd 25.00 4.17
Mumias Sugar Co. Ltd 5.65
2.73
Unga Group Ltd 13.35
2.69
Express Kenya Ltd 3.90 2.63
Kenya Re Ins. Co. Ltd 12.55
1.62
Losing Stocks
Equity Price (KES) % Change
Eaagads Ltd 31.00
-8.82
Kenya Airways Ltd 12.00 -3.61
Eveready E.A Ltd 1.60 -3.03
Kenya Power & Lighting 18.15 -2.42
Sasini Ltd 3.60 -1.77
Source: NSE *Closing Prices
Daily Market Note
2
Table 3: NSE Summary
Source: NSE & Genghis Capital Estimates
Table 4: Foreign Equity Turnover
Source: NSE & Genghis Capital Dealers
The Automobiles & Accessories Sector was the best performer, registering gains of 0.70% supported by
Car & General (K) Ltd (NSE: C&G) up 4.17% to a VWAP of Kes.25.00. The total index performance
decreased 0.20% where 5 of the 10 segments closed in negative territory.
The Agricultural Segment was the worst sector performer recording a loss of 1.71%. Losses are
attributed to the 8.8% decline of Eaagads (NSE: EGDS) to a VWAP of Kes.31.00.
Table 5: Daily Segmental Price Performance Analysis
Foreign Investor Equity Turnover
5th November 2012 6th November 2012
Buys (Kes) Sales (Kes) Buys (Kes) Sales (Kes)
101,805,605.00 116,044,670.00 94,670,107.50 32,329,862.50
Net Inflow/(Outflow) Position
14,239,065.00 Net Inflow/(Outflow) Position
62,340,245.00
Sector Constituents Price Performance (% Change)
Automobiles & Accessories 4 0.70
Insurance 6 0.35
Banking 10 0.33 Manufacturing & Allied 9 0.10
Commercial and services 9 0.08
Construction and Allied 5 -0.29
Energy and petroleum 4 -0.43
Telecommunication and Technology 2 -0.54
Investment 4 -0.62
Agricultural 7 -1.71
Total Index 60 -0.20
Source: NSE & Genghis Capital
5th Nov 2012 6th Nov 2012 % Change
Market Cap. (Kes.Bn) 1213.97 1213.00 -0.08%
Equity T/O: (Kes.Mn) 316.10 314.87 -0.39%
Local/Foreign Equity T/O: (%) 65.54/34.46 59.67/40.33 N/A
Advance:Decline Ratio 19:10 16:15 N/A
Bond T/O: (Kes.Mn) 1911.95 2138.80 11.86%
Sell/Buy Back Transactions T/O:
(Mn)909.95 1285.60 N/A
Sell/Buy Back Transactions (% of
Total Bond T/O)47.59% 60.11% N/A
Daily Market Note
3
Trading Ideas:
The table below shows the performance of selected stocks that Genghis Capital recommended in the year.
Table 6: Equity Picks (Fig in KES)
CompanyPrice at
Recommendation
12 Month
Target Price
Current
Price
Upside
Potential
Return to
DateRecommendation
Centum Investments Ltd 14.55 19.55 12.25 37.34% -15.81% BUY
Equity Bank Limited 15.80 19.90 24.50 -23.12% 55.06% SELL
KenolKobil Limited 9.80 16.90 14.75 12.72% 50.51% HOLD
NIC Bank Limited 26.50 45.50 39.00 14.29% 47.17% BUY
EA Cables Ltd 11.80 14.55 11.15 23.37% -5.51% BUY
Athi River Mining Ltd 156.00 220.00 227.00 -3.18% 45.51% HOLD
Diamond Trust Bank Ltd 88.50 123.40 118.00 4.38% 33.33% HOLD
KCB Group Ltd 18.50 27.10 30.00 -10.70% 62.16% HOLD
Uchumi Supermarkets Ltd 7.20 18.25 19.95 -9.32% 177.08% HOLD
Kenya Power & Lighting Co. 15.85 22.00 18.15 17.50% 14.51% BUY
Nation Media Group Ltd 153.00 197.70 223.00 -12.80% 45.75% HOLD
British American Investments 4.00 6.25 6.15 1.60% 53.75% HOLD
Bamburi Cement Ltd 168.00 201.00 176.00 12.44% 4.76% HOLD
Cooperative Bank Limited 11.55 18.50 12.60 31.89% 9.09% BUY
Kenya Reinsurance Corp. 10.05 15.35 12.55 18.24% 24.88% BUY
KenGen Ltd 8.30 16.25 9.20 43.38% 10.84% BUY
Jubilee Holdings Ltd 163.00 186.00 170.00 8.60% 4.29% HOLD
Housing Finance Ltd 13.65 27.00 15.45 42.78% 13.19% BUY
Scangroup Ltd 49.25 59.60 60.50 -1.51% 22.84% HOLD
Portfolio Return 34.39%
Source: Genghis Capital Ltd
Fixed Income:
Government Seeks to Raise 12Bn…
Money Markets: The CBK was aggressive in the market mopping up Kes.5Bn via REPOs and TADs as the interbank rate remained constant at 8.69%.
Primary Markets: The182-Day and 364-DayT-Bills will be auctioned on Wednesday, 7th November
where the government seeks to raise Kes.3Bn and Kes.6Bn respectively. The regulator will be seeking
Kes.3Bn from the 91-Day T-Bill that will be auctioned the following day.
Secondary Markets: Bond turnover improved 12% to Kes.2.1Bn driven by Sell/Buy Back transactions
that contributed to 60% of the activity with a turnover of Kes.1.3Bn.
Table 7: Short -Term Interest Rates, Treasury Notes & CD’s
Tenor Kenya Uganda Tanzania U.S LIBOR (USD)
91 Day 10.24% 9.69% 11.98% 0.09% 0.35%
182 Day 10.85% 14.68% 13.13% 0.14% 0.63%
1 Year 10.57% 13.93% 13.40% 0.17% 0.97%
2 Year 12.50% 13.34% 14.53% 0.28% --
5 Year 11.86% 12.16% 14.49% 0.72% --
10 Year 12.71% 15.28% 14.20% 1.71% --
Source: CBK, BOU, BOT, US Treasury, BBA, Genghis Capital
Daily Market Note
4
Currency:
Strong Start to the Week…
Performance: The KES was weak against all its African counterparts and the USD as the market
awaits the MPC decision tomorrow. The largest loss was 0.43% in the ZAR/KES pair followed by
0.43% against the TZS. The largest gains were 0.92% and 0.24% against the INR and EUR
respectively. The Euro is still slipping against major currencies over uncertainty concerning
Greece’s next aid payment.
Table 8: Currency Rate
Technical Analysis and Outlook:The chart below shows the Know Sure Thing and Trading
Envelope indicators on the USDKES currency pair over a one year period. They both signify an
improvment in the volatility of the currency pair due to the tightening policy adopted by the
government in 2011 extended in the current year.
Currency Pair 5th Nov 2012 6th Nov 2012
USD/KES 85.45 85.55
GBP/KES 136.98 136.83
EUR/KES 109.65 109.39
ZAR/KES 9.74 9.79
KES/UGX 30.19 30.16
KES/TZS 18.66 18.57
INR/KES 1.58 1.57
Source: Bloomberg 4.00pm E.A.T, Genghis Est. Estimates
Daily Market Note
5
Genghis Index:
D
Table 9: Genghis Index Performance
Indicator Previous Current % Change
Price Index Performance (%) -0.17% -0.13% N/A
Market Capitalization (Kes.Bn) 994.608 994.334 -0.03%
No. of Shares Traded (000) 8,535 9,624 12.76%
P/E Ratio 10.40x 10.39x N/A
Indicator Previous Current % Change
Price Index Performance (%) 0.85% -0.01% N/A
Market Capitalization (Kes.Bn) 145.453 145.838 0.26%
No. of Shares Traded (000) 6,897 6,185 -10.33%
P/E Ratio 6.91x 6.91x N/A
Indicator Previous Today % Change
Price Index Performance 0.64% -0.32% N/A
Market Capitalization (Kes.Bn) 12.736 12.747 0.09%
No. of Shares Traded (000) 247 807 226.45%
P/E Ratio 12.90x 12.77x N/A
Genghis Large-Cap Index
Genghis Mid-Cap Index
Genghis Small-Cap Index
Source: Genghis Capital
Large-Cap Index
The index dropped 0.13% further with Market
Capitalisation decreasing to Kes.994.3Bn.
The best performing counter in this segment was
Mumias Sugar Co. Ltd (NSE: MSC) up 2.73%.
Losing by the biggest margin were Kenya Airways Ltd
(NSE: KQ) down 3.61%.
Mid-Cap Index
The Index lost 0.01% over yesterday’s close as Market
Capitalisation increased to Kes.145.8Bn.
This section’s best performer was Kenya Re Insurance
Co. Ltd (NSE: KENRE) up 1.62%.
Losing by the biggest margin was Sasini Ltd (NSE:
SASN) down 1.77%.
Small-Cap Index
Price performance had a 0.32% decline as Market
Capitalization increased to Kes.12.75Bn.
Gaining by the biggest margin was Car & General (K)
Ltd (NSE: C&G) up 4.17%.
Losing by the biggest margin was Eaagads Ltd (NSE:
EGDS) shedding 8.82%.
Daily Market Note
6
Daily Market Note
7
Contacts Report By: Moses Waireri,Research Analyst | Tel:+254 20 2774781 | Email: [email protected]
Report By: Evelyne Wanjiku, Research Analyst | Tel:+254 20 2774781 | Email: [email protected] Report By:AnthonyKimani, Research Analyst | Tel:+254 20 2774781 | Email: [email protected]
Carol Matu, Head Dealer | Tel: +254 20 2774789 | Email: [email protected] GachanjaWeru, Fixed Income Dealer| Tel:+25420 2774756 | Email: [email protected]
George Guy,Fixed Income Dealer | Tel:+254 20 2774756| Mob: +254 727 142231 | Email: [email protected] Nyawira Waithaka, Equity Dealer | Tel:+254 20 2774777 | Mob: +254 723 693481 | Email: [email protected] Andrew Maina, Senior Equity Dealer | Tel:+254 20 2774789 | Mob: +254 722 667936 | Email: [email protected]
Disclaimer: The content provided on this document is provided as general information and does not constitute advice or recommendation by Genghis Capital
Ltd and should not be relied upon for investment decisions or any other matter and that this document does not constitute a distribution recommending the
purchase or sale of any security or portfolio. Please note that past performance is no indication of future results. The ideas expressed in the document are
solely the opinions of the author at the time of publication and are subject to change without notice. Although the author has made every effort to provide
accurate information at the date of publication all information available in this report is provided without any express or implied warranty of any kind as to
its correctness. You should consult your own independent financial adviser to obtain professional advice before exercising any decisions based on the
information present in this document. Any action that you take as a result of this information, analysis, or advertisement is ultimately your responsibility.
Genghis Capital Ltd, Prudential Assurance Building, Wabera Street, Nairobi. Tel: +254 20 2774760Fax: +254 20 246334
