Genghis Cross-Asset Weekly Strategy - 8th June 2020
In this week's edition of the Weekly Cross-Asset Strategy Report, we give a recap of the equities, fixed income, currencies and derivatives 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) and Zamara Index.
Genghis Trading Ideas for the week…
Equities
BUY KCB Group Plc at KES 34 levels (TP: KES 62.52; +78% upside)
Attractive trading multiples; P/B 0.88x, dividend yield of 10.0% backed by strong fundamentals (above average Return on Equity - ROE of c.20%).
Fixed Income
BUY FXD1/2019/5 at 11.10% - 11.15% levels
High liquidity environment and in addition to the re-opening of bonds that domicile in the short-to-medium part of the curve.
Global Markets
SELL EURUSD (Take Profit target of 1.0782)
We think the shared currency will remain weak on the backdrop of a weaker global growth coupled with Euro-Zone policy constraints.
Derivatives
We are timing to enter a SHORT position on SAFARICOM September 2020 future contract with a Take Profit at 21.5 levels (technical analysis has a strong support at the 2019 low) and Stop Loss at 32.0 levels.
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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