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November 14, 2018

KCB rallies to a nine-week high at Sh28.50

Kenya Commercial Bank Boss Joshua Oigara./ENOS TECHE
Kenya Commercial Bank Boss Joshua Oigara./ENOS TECHE

The dollar is strenghtening across the board as Investors anticipate a US rate hike this month [100% probability] and a more aggressively minded Federal Reserve.

Interestingly, the Kenya shilling was last trading at 102.495, a more than 2-month high.

The Nairobi All Share snapped a losing streak which had seen the All Share fall to a May 2013 Low yesterday and firmed +0.23 points to close at 119.85

The Nairobi NSE20 Index firmed +3.22 points to close at 2851.15.

Equity turnover topped 1b to clock 1.019b with most of the business transacted in Safaricom.

KCB Group reported FY 16 earnings ahead of the opening bell at the Nairobi Securities Exchange. KCB reported a +9.622% FY profit before tax acceleration and a +0.506% gain in FY PAT. The dividend was hiked a mouth-watering 50% to Sh3 a share which is one heck of a coupon to be clipping and underpinned todays price action. "Customer deposits increased 6% to KShs.448.2B, Total Assets expanded by 7% to Sh595.2B While Net Loans & Advances were up 11% to Sh385.7 billion. KCB has acquired over 10M customers on its mobile platform either directly or through partnerships over the past 5 years which confirms that KCB has already stepped boldly into a new digital Future. The International Business contribution dropped to below 5% as South Sudan was written down. KCB reported that FY Gains/ [losses] from translating the financial statements of foreign operations [6.154131b] vs. 317.968m the previous year. Counter-intuitively this was a kind of muscle-flexing because only a very strong bank can take that kind of impairment and not even blink. These were strong results and given its a a Darwinian Banking sector then KCB has effectively messaged its shareholders that it is in fact one of the fittest in this Darwinian world. KCB rallied an eye-popping +5.56% to close at 28.50 a 9 week high. KCB traded 2.674m shares worth 76.762m. KCB will close positive for the year tomorrow plus Investors will be bagging a very juicy dividend.

NIC reported a -3.286% slide in FY 16 Earnings Per Share and grew its Total Assets +2.214% to close the Year at 169.589b. According to Kestrel Research ''Excluding provisions, pre-tax earnings were actually up 23% y/y largely supported by NIMs expansion (+120bps y/y to 7.3%).'' For those looking for more beta in their Bank investments, I would have thought NIC will provide that.Its well-managed and has the nous to navigate what remain turbulent banking waters. NIC Bank eased back -1.02% to close at 24.25 and traded just 10,300 shares.

Safaricom where the regulator effected a Put Option and where the share price had retreated -15.4% in 2017 and through this mornings open, closed -1.23% at a fresh one year low of 16.00. However, yesterday we saw the base at 16.00 as Safaricom was trading at session highs of 16.65 +2.78% at the Finish Line. In the old days, yesterday's price action would be called a ''blow-off bottom''

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