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November 14, 2018

Investors keen on Kenya Power dividend worth

An investor looks on the screen of the trade listing and Market watch in Nairobi on January 13. /Enos Teche
An investor looks on the screen of the trade listing and Market watch in Nairobi on January 13. /Enos Teche

Prime Minister Shinzo Abe of Japan won a two-thirds ‘Supermajority’ in the snap election and can expunge the pacifist component in the Japanese constitution.

The Nikkei 225 Index bagged a record 15th straight day of gains.

The Dollar is making upwards progress after a torrid Trump ‘’apocalypse’’ year.

The Euro lost ground as the markets consider Rajoy’s response to Carlos Puidgemont’s dash for secession in Catalonia.

The Financial Times concluded an article about Kenya with the following

“Business has never been this bad, not even in the Moi years,” says the chief executive of one of the country’s biggest banks, referring to Daniel arap Moi.

The Kenya Shilling slipped to 103.70 versus the Dollar. We touched 104 momentarily earlier in the year.

The Nairobi All Share after retreating -10.688% since August 28 (2017 closing high) finally rebounded and closed 0.735% at 156.07 and on robust volume action worth 1.176b.

The Nairobi NSE20 Index could not snap its losing streak which had seen the NSE20 retreat -13.856% since August 15 (2017 closing High) and edged 2.44 points lower to close at 3541.46.

Safaricom firmed +1.04% to close at 24.25 and was trading session highs of 24.75 +3.13% at the finale. Today’s constructive price action was delivered on the back of some good sized volume action with 23.406m shares worth 567.694m traded and the highest volume traded for more than six weeks. Safaricom’s price has corrected -6.73% lower since August 28 outperforming the Nairobi All Share which has retreated -10.688% over the same dates. There is plenty to get excited about around Safaricom and I look for a meaningful rally towards 32.00 before year end.

Kenya Airways rallied +2.08% to close at 4.90, an eight-week high and traded 1.117m shares.

Jubilee Insurance improved +1.87% to close at a five-month high of 490.00 and on unusually high volume action of 337,100 shares (0.465% of its shares) worth 165.346m. Jubilee reported a +23.168% acceleration in H1 2017 earnings per share and is +1.734% on a total return basis this year and has room to probe levels of 500.00+

KCB closed +0.68% better at 36.75 and traded 3.975m shares.

Equity Bank closed unchanged at 36.25 and traded 2.667m shares.

Standard Chartered was upticked +4.62% to close at 223.00 on 300 shares. The Supply is exhausted at these levels.

KPLC reported fiscal year earnings where revenue clocked a +11.411% increase to reach 120.742b, profit before tax slid -9.691% to 10.912b and eked out a +0.959% gain, earnings per share was 3.72 and the dividend was maintained at 50 cents a share. KPLC cited ‘’ increased transmission and distribution costs as a result of maintenance activities on the expanded network’’ as crimping earnings. The price earnings ratio is less than three which is egregious but investors need to be aware that this has been the situation for a while. At some point we will have a price trigger and a price earning of six (which would double the share price) is a little less egregious and possible but will require management to make the case for the share price, something they have been loathing to do. KPLC firmed +0.52% to close at 9.60 and was trading at a session high of 9.80 +2.62% at the finish. KPLC’s dividend is worth 5.1% of yield and some investors will be keen on snaffling that up.

KenGen rebounded +2.48% to close at 8.25 and traded 339,500 shares. KenGen served up a +34.02% financial year earnings per share gain and last weeks profit taking was a knee-jerk reaction to the dividend pass. I expect that to be reversed and have a price target of 10.00.

EABL rallied +1.666% to close at 244.00 and traded 681,800 shares worth 166.995m. EABL trades on a trailing price earning of 25.00.

ARM rebounded +4.924% to close at 13.90. ARM remains -45.49% in 2017.

Aly-Khan is a financial analyst

 

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