Genghis Weekly Strategy - 27th April 2020
In this week's edition of the Weekly Strategy Report, we give a recap of the equities and fixed income markets' performance over the past week and our trading ideas for the coming week.
Our Momentum, Income and Value equities portfolios continue to outperform the benchmark NSE 20 index. Performance of the Momentum and Income portfolios was ahead of all the benchmark indices including the Nairobi All Share Index (NASI).
Genghis Trading Ideas for the week…
Equities
We maintain our BUY recommendation on SCBK and Absa to income investors with a long-term investment horizon. The two banks maintain the highest yield in the banking sector, with cum-dividend yields of 10.4% and 10.3%, respectively. The two banks have a history of consistent and stable growth in dividend (11.8% and 10.0%, respectively, over the last two years), while operating metrics have improved over the same period (ROE for the two banks rising over the last two years, 150 and 330bps, respectively). Their attractiveness also hails from their better defensive characteristics compared to their large tier peers.
Fixed Income
SELL FXD1/2017/5 at 10.30% levels. Demand is still elevated at the short-end of the curve and investors holding this paper offload it off their portfolios. The yield on the paper has some headroom to ease as it has dropped 16.4bps YTD compared to an average 58bps in papers with lower durations. Its modified duration of 1.94 is enticing as investors reduce their duration in this uncertain environment.
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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