Report
Genghis Capital
Churchill Ogutu ...
  • Gerald Muriuki
  • Grace Ndungu
  • Patrick Mumu

Genghis Weekly Strategy-March 4th 2019

In our second Weekly Strategy Report, we give our equity trading ideas and highlight our model portfolio which continues to outperform the benchmark index on all fronts. We also give our fixed income trading idea and our thoughts on the 25-year infrastructure bond currently on offer. 

Genghis Trading Ideas for the week…
Equities

  • BUY NIC at levels of KES 35.00 as the stock offers a potential upside of 22.2% to our target price of KES 42.80, based on our P/B valuation multiple assumption of 1.0x. This is derived from a P/B-ROE regression with other Tier I banks.
  • Buy BARCLAYS at levels of KES 11.00 for income investors, as the counter offers a potential dividend yield of c. 9.0%.
  • BUY KCB at levels of KES 42.00 and below. The counter maintains an above average dividend yield (7.2%) and continues to trade below its historical P/B (1.2x vs. 1.6x).
Fixed Income
  • BUY the recently issued fifteen-year bond (FXD1/2019/15) at levels of 12.75% and above. We believe that this provides better return than the 25-year infrastructure bond (IFB) currently on issue.
  • We do not expect significant interest in the IFB given that majority of the potential buyers are already tax exempt and the coupon does not offer them compensation for that tenor. Also, the amortized nature of the bond is unattractive to long term buyers.
04/03/2019 1 EN
Provider
Genghis Capital
Genghis Capital

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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Analysts
Churchill Ogutu

Gerald Muriuki

Grace Ndungu

Patrick Mumu

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