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Daily Market Note

Bloomberg: GNCP <GO> www.genghis-capital.com

th

7 November 2012

Equities

2011

NSE Recoups Losses.... The NSE 20 Share Index reversed the downward trend to gain 7.18 points closing at 4121.13. The NASI was also up 0.50% as the FTSE 15 and FTSE 25 both shed 0.12% and 0.18% respectively. Equity turnover increased to Kes.581Mn as bond turnover improved to Kes.3.1Bn. Foreign investor’s further increased their participation with a contribution of 53% to market activity and a long position of Kes.312Mn. Market capitalisation was relatively stable above Kes.1.2Tn.

“Activity is the enemy of investment returns.” – Warren Buffett The highlights of the day’s trading activity are listed below: Table 1: NSE Performance

Table 2: NSE Indices

Market Indices Summary

Top Traders Equity

Volume

Index

Yesterday

Today

% change

91.36

91.82

0.50%

4113.96

4121.13

0.17%

Safaricom Ltd

39,136,000

NASI

Equity Bank Ltd

6,077,500

NSE 20 Share

Co-operative Bank Ltd

2,694,700

Uchumi Supermarket Ltd

1,149,900

Barclays Bank Ltd

1,061,200

Gaining Stocks Equity

Price (KES)

% Change

1.65

4.17

Scangroup Ltd

62.00

2.48

Safaricom Ltd

4.45

2.30

CFC Stanbic Bank Ltd

40.00

1.91

Sasini Ltd

11.30

1.80

Eveready East Africa Ltd

Losing Stocks Equity

Price (KES)

% Change

Kenya Airways Ltd

11.40

-5.00

Car & General Ltd

24.00

-4.00

Olympia capital Ltd

3.70

-3.90

Express Kenya Ltd

3.80

-2.56

Uchumi Supermarket Ltd

19.50

-2.25

Source: NSE

FTSE NSE 15

122.41

122.26

-0.12%

FTSE NSE 25

125.02

124.80

-0.18%

Source: NSE The Advance/Decline ratio at the close of today’s trading session stood at 21/18 with 21 stocks advancing in price and 18 shedding prices.

Foreign investor participation increased to 52.7% from yesterday’s 40%. Today’s session resulted in a net inflow of Kes.312Mn, 5 times what was recorded yesterday. Safaricom Limited (NSE: SCOM) was the most actively traded stock among foreigners. It recorded a turnover of Kes.129Mn. Equity Bank Ltd (NSE: EQTY) recorded the second highest foreign investor turnover. It registered a turnover of Kes.83Mn vs. Kes.59Mn yesterday. The 2 counters accounted for 36.5% and 69.2% of the total NSE and total foreign activity respectively. Equity Bank Ltd (NSE: EQTY) had the highest net inflow registering a net inflow of Kes.117Mn.

*Closing Prices

The highest net outflow was recorded on KenolKobil limited (NSE: KENO) at Kes.5.28Mn.


Daily Market Note Table 3: NSE Summary 6th Nov 2012

7th Nov 2012

% Change

Market Cap. (Kes.Bn)

1213.00

1219.38

0.01

Equity T/O: (Kes.Mn)

314.87

581.27

0.85

59.67/40.33

47.29/52.71

N/A

16:15

21:18

N/A

2138.80

3086.90

0.44

1285.60

1289.60

N/A

60.11%

41.78%

N/A

Local/Foreign Equity T/O: (%) Advance:Decline Ratio Bond T/O: (Kes.Mn) Sell/Buy Back Transactions T/O: (Mn) Sell/Buy Back Transactions (% of Total Bond T/O)

Source: NSE & Genghis Capital Estimates

Table 4: Foreign Equity Turnover

Foreign Investor Equity Turnover th

7th November 2012

6 November 2012 Buys (Kes) 94,670,107.50 Net Inflow/(Outflow) Position

Sales (Kes)

Buys (Kes)

32,329,862.50

Sales (Kes)

462,461,200.00 Net Inflow/(Outflow) Position

62,340,245.00

150,349,690.00 312,111,510.00

Source: NSE & Genghis Capital Dealers

The Telecommunication and Technology Sector was the best performer, registering gains of 1.70% supported by gains in Safaricom Ltd (NSE: SCOM) up 2.3% to a VWAP of Kes.4.45. The total index performance decreased 0.05% where 5 of the 10 segments closed in negative territory. The Investment segment was the worst sector performer recording a loss of 1.43%. Losses are attributed to the 3.90% decline of Olympia Capital Holdings (NSE: OCH) to a VWAP of Kes.3.70. Table 5: Daily Segmental Price Performance Analysis

Sector

Constituents

Price Performance (% Change)

Telecommunications and Technology

2

1.70

Energy and petroleum Manufacturing and Allied

4 9

Banking

10

0.71 0.34 0.14

Construction and Allied

5

0.07

Agriculturals

7

-0.17

Insurance

6

-0.44

Commercial and services

9

-0.46

Automobiles and accessories

2

-1.00

Investment

4

-1.43

Total Index Source: NSE & Genghis Capital

60

-0.05

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Daily Market Note 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) Price at 12 Month Recommendation Target Price

Company

Current Price

Upside Potential

Return to Date

Recommendation

Centum Investments Ltd

14.55

19.55

12.30

37.08%

-15.46%

BUY

Equity Bank Limited

15.80

19.90

24.50

-23.12%

55.06%

KenolKobil Limited

9.80

16.90

14.85

12.13%

51.53%

NIC Bank Limited

26.50

45.50

39.50

13.19%

49.06%

SELL HOLD BUY BUY HOLD HOLD HOLD HOLD BUY HOLD HOLD HOLD BUY BUY BUY HOLD BUY HOLD

EA Cables Ltd

11.80

14.55

11.10

23.71%

-5.93%

Athi River Mining Ltd

156.00

220.00

223.00

-1.36%

42.95%

Diamond Trust Bank Ltd

88.50

123.40

118.00

4.38%

33.33%

KCB Group Ltd

18.50

27.10

30.00

-10.70%

62.16%

Uchumi Supermarkets Ltd

7.20

18.25

19.50

-6.85%

170.83%

Kenya Power & Lighting Co.

15.85

22.00

18.25

17.05%

15.14%

153.00

197.70

225.00

-13.81%

47.06%

4.00

6.25

6.10

2.40%

52.50%

168.00

201.00

178.00

11.44%

5.95%

Cooperative Bank Limited

11.55

18.50

12.60

31.89%

9.09%

Kenya Reinsurance Corp.

10.05

15.35

12.50

18.57%

24.38%

Nation Media Group Ltd British American Investments Bamburi Cement Ltd

KenGen Ltd Jubilee Holdings Ltd

8.30

16.25

9.35

42.46%

12.65%

163.00

186.00

170.00

8.60%

4.29%

Housing Finance Ltd

13.65

27.00

15.25

43.52%

11.72%

Scangroup Ltd

49.25

59.60

62.00

-4.03%

25.89%

Portfolio Return Source: Genghis Capital Ltd

34.33%

Fixed Income: Yields Maintain Upward Trend… Money Markets: The CBK was aggressive in the market mopping up Kes.7Bn via REPOs and TADs as the interbank rate remained constant at 8.69%. Primary Markets: The182-Day and 364-DayT-Bills were auctioned today where the government accepted bids worth Kes.5.77Bn after receiving Kes.8.75Bn for the Kes.9Bn it had on offer. Yields rose by 6.9bps to 10.923% on the 182-Day T-Bill and 137.3bps to 11.943% on the 364-Day T-Bill. The regulator will be seeking Kes.3Bn from the 91-Day T-Bill that will be auctioned today. Secondary Markets: Bond turnover improved 61% to Kes.3.1Bn driven by the 15-yr and 20-yr FXD’s that contributed to 46% of the activity with a turnover of Kes.1.4Bn. 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

10.92%

14.68%

13.13%

0.14%

0.63%

1 Year

11.94%

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

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Daily Market Note Currency: KES Maintains Its Stabilityâ&#x20AC;Ś Performance: The local currency was fairly stable with its largest losses being 1.478% in the ZAR/KES pair followed by 0.48% against the EUR. The largest gains were 0.244% and 0.21% against the UGX and TZS respectively. Miners return to work in the South Africa has led to the strengthening of the Rand. Table 8: Currency Rate

USD/KES

6thNov 2012 85.55

7thNov 2012 85.51

GBP/KES

136.83

136.99

EUR/KES

109.39

109.92

ZAR/KES

9.79

9.93

KES/UGX

30.16

30.23

KES/TZS

18.57

18.61

1.57

1.57

Currency Pair

INR/KES Source: Bloomberg 4.00pm E.A.T, Genghis Est.

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 Estimates government in 2011 extended in the current year.

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Daily Market Note Genghis Index: Large-Cap Index

Table 9: Genghis Index Performance Genghis Large-Cap Index Indicator Price Index Performance (%) Market Capitalization (Kes.Bn) No. of Shares Traded (000) P/E Ratio

Previous -0.13% 994.334 52,009 10.43x

Current 0.32% 1001.000 9,624 10.39x

Genghis Mid-Cap Index Indicator Previous Current Price Index Performance (%) -0.01% -0.04% Market Capitalization (Kes.Bn) 145.838 145.998 No. of Shares Traded (000) 6,185 4,359 P/E Ratio 6.91x 6.93x

Genghis Small-Cap Index Indicator Previous Price Index Performance -0.32% Market Capitalization (Kes.Bn) 12.747 No. of Shares Traded (000) 807 P/E Ratio 12.77x

Today -0.32% 12.665 114 12.72x

% Change N/A 0.67% -81.50% N/A

The index dropped 0.32% further with Market Capitalisation decreasing to Kes.1.001Bn. The best performing counter in this segment was Safaricom Ltd (NSE: SCOM) up 2.30%. Losing by the biggest margin was Kenya Airways Ltd (NSE: KQ) down 5.00%.

% Change N/A 0.11% -29.52% N/A

% Change N/A -0.64% -85.89% N/A

Mid-Cap Index

The Index lost 0.04% over yesterday’s close as Market Capitalisation increased to Kes.146Bn. This section’s best performer was ScanGroup Co. Ltd (NSE: SCAN) up 2.48%. Losing by the biggest margin was Uchumi Ltd (NSE: UCHM) down 2.26%. Small-Cap Index

Source: Genghis Capital

D

Price performance had a 0.09% decline as Market Capitalization increased to Kes.12.66Bn. Gaining by the biggest margin was Eveready East Africa Ltd (NSE: EVRD) up 3.12%. Losing by the biggest margin was Car and General Ltd (NSE: C&G) shedding 4.00%.

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Daily Market Note

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Daily Market Note

Contacts Report By: Moses Waireri,Research Analyst | Tel:+254 20 2774781 | Email: mwaireri@genghis-capital.com Report By: Evelyne Wanjiku, Research Analyst | Tel:+254 20 2774781 | Email: ewanjiku@genghis-capital.com Report By:AnthonyKimani, Research Analyst | Tel:+254 20 2774781 | Email: akimani@genghis-capital.com Carol Matu, Head Dealer | Tel: +254 20 2774789 | Email: cmatu@genghis-capital.com GachanjaWeru, Fixed Income Dealer| Tel:+25420 2774756 | Email: gweru@genghis-capital.com George Guy,Fixed Income Dealer | Tel:+254 20 2774756| Mob: +254 727 142231 | Email: gguy@genghis-capital.com Nyawira Waithaka, Equity Dealer | Tel:+254 20 2774777 | Mob: +254 723 693481 | Email: nwaithaka@genghis-capital.com Andrew Maina, Senior Equity Dealer | Tel:+254 20 2774789 | Mob: +254 722 667936 | Email: amaina@genghis-capital.com 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 2774760 Fax: +254 20 246334 7

Genghis Capital Daily Market Monitor – 7th November 2012  
Genghis Capital Daily Market Monitor – 7th November 2012  

Equities: The NSE 20 Share Index reversed the downward trend to gain 7.18 points closing at 4121.13. The NASI was also up 0.50% as the FTSE...

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