Genghis Weekly Strategy - 23rd December 2019
Our Momentum, Income and Value equities portfolios continue to outperform the benchmark index, NSE 20 YTD. Notably, the Momentum portfolio YTD performance is ahead of all the benchmark indices including the Zamara Index.
Genghis Trading Ideas for the week…
Equities
- BUY EABL at current price levels of below KES 195. EABL trades at attractive multi-year low P/E ratio of 17.4x against peer average of 26.9x. At these levels, EABL has eroded the market premium it has historically maintained against peers despite maintaining its above peer-average return on equity (ROE) of 82.8% and a dividend yield of 4.3%. An upswing in general market sentiment would give value investors an upside to the stock with the highest return on equity at the NSE.
Fixed Income
- SELL FXD3/2019/5 at 11.40% - 11.45%. We maintain our bullish sentiment on the newly issued 5-year tenor. Last week, the paper recorded muted trading on account of the TAP Sale that was successful. We expect gradual mean reversal to circa 11.30% levels; the average of the rest of the 5-year maturities. As such, 11.40% - 11.45% levels are attractive exit points.
Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:
- i. Securities(Equity/Debt) Trading
- ii. Research
- iii. Wealth Management services
- iv. Investment Advisory & Management via the GenCap Unit Trusts
- v. Corporate Finance & Transaction Advisory services
The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.
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