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January 19, 2019

East Africa Breweries Limited five year bond will be fully subscribed


The US stock market suffered its biggest losing day since the Election of President Trump, yesterday.

The noose is around President Trump's neck and US political risk under estimated,

crude oil fell to a November 2016 low and the current price structure is highly problematic for oil producers who if they are not quaking about the risk of an asymmetric downside move, then they are asleep at the wheel.

The Nairobi All Share rallied +0.469% to close at 128.38 a fresh 10 week high.

The Nairobi NSE20 Index +0.892% to close at 3,037 a fresh 10 week high.

Kenya shilling was trading at 103.00 and crude oil prices support a further firming of the shilling.

Safaricom closed unchanged at 18.10 but was trading at 18.30 +1.1% at the finish signaling the direction of travel. Safaricom traded 11.702 million shares worth Sh 211.881million.

Kenya Airways predictably rallied +8.49% to close at 5.75 and traded 58,400 shares. Buyers outpaced sellers by a factor of 10 to 1.

Nation Media rallied +5.23% to close at 90.5 and traded 5,000 shares. Nation Media has narrowed its YTD loss to -2.688%.

Diamond Trust Bank reported FY 16 earnings where FY profit after tax accelerated +17.096%. DTB grew loans to customers +4.933%, Total assets surged +20.778% to clock 328.044b, FY earnings per share expanded +21.351% to 26.94. Nasim Devi conserves cash and the FY dividend was 2.60 +4.000% and just 9.65% of its EPS. DTB also announced that the bank has entered into a definitive agreement to acquire Habib Bank Limited by issuance of 13,281,105 ordinary new shares of DTB at a price of Sh 137.39 per share to HBL, resulting in a 4.75% dilution to existing shareholders of DTB. These are Strong results plain and simple and at a P/E of less than four and a price to book of 0.72 - This is a screaming buy, in my opinion. DTB is well organised and well run and ambitious regionally as well. DTB rallied a mighty +11.16% to close at 114.50 and traded 500,500 shares. DTB is -2.966% and has plenty of price headroom.

Barclays Bank rallied +2.808% to close at 9.15 and traded 143,200 shares.

Equity Group firmed +0.85% to close at 29.75 a 10 week high. Equity traded 2.792million shares.

Jubilee Holdings retreated -3.33% to close at 435.00 and is now -11.22% through 2017.

EABL which had become brutally oversold rallied +1.376% to close at 221.00 and was trading at 225.00 +3.21% at the closing bell. EABL had become horribly oversold and its five year bond will be fully subscribed and some.


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