High demand for KCB shares points to a price

Thursday, August 9, 2012 - 00:00 -- BY ALY KHAN SATCHU

The NSE20 eased 0.34 points to close at 3815.10. The NSE20 has corrected 63 points [1.624%] since closing at 3878 a 12 month closing high on July 26th. The NSE20 has rallied 19.032% in 2012. The Nairobi All Share firmed 0.18 points to close at 83.64. Equity turnover was 308.492m and dominated by Equity Bank.

In Agriculture, Eaagads [which had been in a parabolic move - had rallied 67.69% 27th July through yesterday morning] corrected 6.422% lower to close at 51.00 Safaricom closed unchanged at 3.85 and traded 2.406m shares worth 9.259m. There was buy side interest for 300% more shares than were traded during the session. Safaricom is +30.508% in 2012 and sits 2.531% below its 2012 and 12 month closing high of 3.95 from July 26th and August 3rd. 4.00 is proving a near term hurdle but I believe it will be hurdled before long.

ScanGroup released its H1 earnings before the opening bell. Bharat Thakrar's ScanGroup reported that H1 billings increased 5.917% to 5.937662b, revenues were +32.438%, profit before tax +11.030979% earnings per share +5.6074%. Through yesterday morning's open, Scangroup had posted a +40.24096% total return in 2012. I think ScanGroup will grow at this sort of trajectory for the next 24 months.

In particular, I think the next growth burst comes from the SSA expansion and that expansion will require some up front spend. ScanGroup eased 0.869% off its 20 month closing high from Tuesday to close at 57.00 and traded 14,600 shares.  I went to the Nation Media H1 earnings release at the @SerenaHotels Nairobi where Nation reported that H1 PBT increased 23.4% and Nation ramped the interim dividend higher by 66.66%. Nation digital revenues increased 54% and NTV Uganda saw operating profit increase 777%. Nation Media is +37.68% on a total return basis in 2012.

Among banks, Kenya Commercial Bank closed unchanged at 24.25 and traded 251,600 shares worth 6.149m. There was buy side demand for 800% more than the shares traded during the session signalling a move higher is imminent. KCB is +54.896% in 2012, trades on a Trailing PE of 6.519 and accelerated H1 2012 PBT +48.18%.

Equity Bank was the most actively traded share at the exchange but closed unchanged at 21.25 and traded 5.116m shares worth 109.57m and 35.518% of the total turnover at the exchange. Equity Bank is +35.25% on a total return basis in 2012, has corrected 6.59% lower since June 22nd when Equity closed at a 12 month High of 22.75. Co-op Bank traded 4th and retreated 1.325% to close at 11.15 and was trading session lows of 11.00 -2.65% at the finish line. Co-op is +16.008% in 2012.

In Industrial and Allied, BAT Kenya traded 2nd at the exchange and rallied 2.8325% to close at 399.00 and traded 166,600 shares worth 66.622m. BAT has closed at a fresh all time high and has posted a sequence of all time closing highs in 2012. BAT is +89.333% on a total return basis and trades on a Trailing PE of 12.9116. BAT Kenya accelerated H1 PAT 20.6%.

EABL traded 3rd and firmed 0.9% to close at 225.00 and traded 194,700 shares worth 43.998m. EABL has delivered a +32.26% total return in 2012 and sits 5.833% beneath its all time closing high of 240.00 from July 5 this year. EABL is set to release FY earnings imminently.