5

Daily Market Note Bloomberg: GNCP <GO>

www.genghis-capital.com 22

nd October 2012

Equities

NSE Maintains Upward Trend…

The bourse continued its outstanding performance as the NSE 20 share index closed at 4,053.29 on gaining 19.72 points. The

NASI was up 0.38 points as both the FTSE 15 and 25 kept the pace appreciating by 0.30% and 0.38% respectively. Equity

turnover was down to Kes.554Mn as bond turnover also declined 9.29%. Foreign investors maintained their long position at

Kes.112Mn with the local investors taking charge of the day’s session at 51% of total turnover. Market capitalisation was flat at

Kes.1.17Tn. The momentum of the bourse seems to be sustainable going forward driven by investor confidence.

"We don't have to be smarter than the rest. We have to be more disciplined than the rest." - Warren Buffett

The highlights of the day’s trading activity are listed below:

Table 1: NSE Performance Table 2: NSE Indices

Market Indices Summary

Index Yesterday Today % change

NASI 89.13 89.51 0.43%

NSE 20 Share 4034.07 4053.79 0.49%

FTSE NSE 15 118.68 119.04 0.30%

FTSE NSE 25 121.25 121.71 0.38%

Source: NSE

The Advance/Decline ratio at the close of today’s trading

session stood at 17/12 with 17 stocks advancing in price and 12

shedding prices.

Foreign investor participation was slumped to 48.64% in

today’s trading compared t0 61.34% at the close of Friday’s

session.

Today’s session resulted in a net inflow of Kes.112.5Mn

compared to a net inflow of Kes.34.85Mn at the close of the

previous trading session.

The highest foreign investor turnover was recorded on Equity

Bank Ltd (NSE: EQTY)–Kes.109.3Mn and Kenya Commercial

Bank Ltd (NSE: KCB)–Kes.63.8Mn. The 2 counters accounted

for 31.23% and 64.21% of the total NSE and total foreign activity

respectively.

Kenya Commercial Bank Ltd (NSE: KCB) recorded the highest

net inflow of Kes.56.5Mn.

The highest net outflow was recorded on Equity Bank

Ltd (NSE: EQTY) at Kes.15.08Mn.

Top Traders

Equity Volume

Equity Bank Ltd 6,031,500

Kenya Commercial Bank Ltd 4,440,900

Co-operative Ltd 3,709,200

Mumias Sugar Company Ltd 2,064,100

Safaricom Ltd 1,889,600

Gaining Stocks

Equity Price (KES) % Change

Kenya Airways Ltd 12.45 3.75

Kenya Re Insurance 12.45 3.32

Bamburi Cement Ltd 170.00 3.03

Longhorn (K) Ltd 10.20 2.00

Pan Africa Insurance 38.75 1.97

Losing Stocks

Equity Price (KES) % Change

Car & General (K) Ltd 23.50 -6.00

Kapchorua Tea Ltd 120.00 -4.00

Olympia Capital Holdings

Ltd

3.50 -2.78

CFC Insurance Holdings 7.30 -2.01

Diamond Trust Bank Ltd 118.00 -1.67

Source: NSE *Closing Prices

Daily Market Note

2

Table 3: NSE Summary

Source: NSE & Genghis Capital Estimates

Table 4: Foreign Equity Turnover

Source: NSE & Genghis Capital Dealers

The Telecommunication and Technology sector was up 0.60% to the top spot, boosted by the

performance of Safaricom Ltd (NSE: SCOM) +1.19% to VWAP 4.25. The total index performance was flat

at 0.00% as the sectors halved in gaining and losing.

The Automobiles & Accessories sector occupied the bottom spot slightly losing 0.17% dragged down by

Car & General (K) Ltd (NSE: C&G) which shed 1.17% to close at a VWAP of Kes.23.50.

Table 5: Daily Segmental Price Performance Analysis

Foreign Investor Equity Turnover

19th October 2012 22nd October 2012

Buys (Kes) Sales (Kes) Buys (Kes) Sales (Kes)

193,569,692.50 158,724,447.50 190,994,500.00 78,538,882.50

Net Inflow/(Outflow) Position

34,845,245.00 Net Inflow/(Outflow) Position

112,455,617.50

Sector Constituents Price Performance (% Change)

Telecommunication & Technology 2 0.60

Construction & Allied 5 0.56

Commercial & Services 9 0.55 Insurance 6 0.55

Banking 10 0.11

Manufacturing & Allied 9 -0.01

Energy & Petroleum 4 -0.19

Investment 4 -0.39

Agricultural 7 -0.57

Automobiles & Accessories 4 -0.24

Total Index 60 0.00

Source: NSE & Genghis Capital

19th Oct 2012 22nd Oct 2012 % Change

Market Cap. (Kes.Bn) 1176.27 1176.27 0.00%

Equity T/O: (Kes.Mn) 574.30 554.17 -3.51%

Local/Foreign Equity T/O: (%) 38.66/61.34 51.36/48.64 N/A

Advance:Decline Ratio 18:16 17:12 N/A

Bond T/O: (Kes.Mn) 2305.15 2091.00 -9.29%

Sell/Buy Back Transactions T/O:

(Mn)0.00 0.00 N/A

Sell/Buy Back Transactions (% of

Total Bond T/O)0.00% 0.00% N/A

Daily Market Note

3

Trading Ideas:

The table below shows the performance of selected stocks that Genghis Capital recommended in the year.

Table 6: Equity Picks (Fig in KES)

CompanyPrice at

Recommendation

12 Month

Target Price

Current

Price

Upside

Potential

Return to

DateRecommendation

Centum Investments Ltd 14.55 19.55 12.40 36.57% -14.78% BUY

Equity Bank Limited 15.80 19.90 23.50 -18.09% 48.73% SELL

KenolKobil Limited 9.80 16.90 14.10 16.57% 43.88% HOLD

NIC Bank Limited 26.50 45.50 35.00 23.08% 32.08% BUY

EA Cables Ltd 11.80 14.55 11.00 24.40% -6.78% BUY

Athi River Mining Ltd 156.00 220.00 228.00 -3.64% 46.15% HOLD

Diamond Trust Bank Ltd 88.50 123.40 118.00 4.38% 33.33% HOLD

KCB Group Ltd 18.50 27.10 28.75 -6.09% 55.41% HOLD

Uchumi Supermarkets Ltd 7.20 18.25 18.95 -3.84% 163.19% HOLD

Kenya Power & Lighting Co. 15.85 22.00 18.60 15.45% 17.35% BUY

Nation Media Group Ltd 153.00 197.70 217.00 -9.76% 41.83% HOLD

British American Investments 4.00 6.25 6.30 -0.80% 57.50% HOLD

Bamburi Cement Ltd 168.00 201.00 170.00 15.42% 1.19% BUY

Cooperative Bank Limited 11.55 18.50 12.60 31.89% 9.09% BUY

Kenya Reinsurance Corp. 10.05 15.35 12.45 18.89% 23.88% BUY

KenGen Ltd 8.30 16.25 8.65 46.77% 4.22% BUY

Jubilee Holdings Ltd 163.00 186.00 165.00 11.29% 1.23% HOLD

Housing Finance Ltd 13.65 27.00 15.05 44.26% 10.26% BUY

Scangroup Ltd 49.25 59.60 59.00 1.01% 19.80% HOLD

Portfolio Return 30.92%

Source: Genghis Capital Ltd

Fixed Income:

2yr-Bond Closes Tomorrow…

Money Markets: The CBK was aggressive in the market mopping up Kes.5Bn via REPOs with the interbank rate at 9.74%.

Primary Markets: The 182-Day & 91-Day T-Bill will be auctioned on 24th October & 25th October

respectively. The regulator seeks to raise Kes4Bn from each paper. The 2-yr Treasury bond bidding

closes tomorrow.

Secondary Markets: Bond turnover dropped 9.3% to Kes.2.09Bn driven by IFB Bonds that transacted

Kes.1.77Bn; 84.6% of the total Bond turnover.

Table 7: Short -Term Interest Rates, Treasury Notes & CD’s

Tenor Kenya Uganda Tanzania U.S LIBOR (USD)

91 Day 8.96% 9.67% 12.45% 0.09% 0.35%

182 Day 10.48% 10.66% 13.01% 0.13% 0.63%

1 Year 10.57% 10.69% 13.76% 0.15% 0.97%

2 Year 11.11% 14.84% 13.81% 0.23% --

5 Year 11.86% 13.91% 14.49% 0.61% --

10 Year 12.71% 15.28% 14.99% 1.62% --

Source: CBK, BOU, BOT, US Treasury, BBA, Genghis Capital

Daily Market Note

4

Currency:

KES Maintains Stability…

Performance: The local currency opened the week with stability still maintained ahead tea

bonus payment. The largest gain was in the ZAR/KES pair up 0.420% with the trend followed

in the USD/KES gaining 0.12%. The largest loss was 1.33% in the INR/KES pair followed by

0.60% in the EUR/KES pair. The KES will face pressure once the end month period

approaches thou we expect only a marginal slip.

Table 8: Currency Rate

Technical Analysis and Outlook: The chart exhibits the Psychological Line of the USDKES

pair over the past 3 years. The currency pair has enjoyed support from the regulator to keep

it at below the 85 level on average.

Currency Pair 19th Oct 2012 22nd Oct 2012

USD/KES 85.28 85.18

GBP/KES 136.66

136.64

EUR/KES 110.59 111.25

ZAR/KES 9.89 9.85

KES/UGX 30.32 30.29

KES/TZS 18.59 18.57

INR/KES 1.57 1.59

Source: Bloomberg 4.00pm E.A.T, Genghis Est.

Estimates

27thJan 2012 30thJan 2012

Daily Market Note

5

Genghis Index:

D

Table 9: Genghis Index Performance

Source: Genghis Capital

Large-Cap Index

The index ascended 0.53% while Market Capitalisation

surged to Kes.970Bn.

The best performing counter in this segment was

Kenya Airways Ltd (NSE: KQ) up 3.75%.

Losing by the biggest margin was Diamond Trust

Bank Ltd (NSE: DTB) down 1.67%.

Mid-Cap Index

The Index to gained 0.22% over yesterday’s close as

Market Capitalisation marginally was down to

Kes.144Bn.

This section’s best performer was Kenya Re Insurance

Ltd (NSE: KENRE) up 3.32%.

Losing by the biggest margin was Pan Africa

Insurance Ltd (NSE: PANFR) down 2.01%.

Small-Cap Index

Price performance shifted -0.66% with market

capitalization stable at Kes.13Bn.

Gaining by the biggest margin was Longhorn Kenya

Ltd (NSE: LKL) up 2.00%.

Losing by the biggest margin was Car & General (K)

Ltd (NSE: C&G) shedding 6.00%.

Daily Market Note

6

Total Mkt Cap. Dividend

Shares Outstanding Kshs Mn. Yield - %

Safaricom Ltd Ord 0.05 40,000,000,000 170,000,000,000 1,889,600 1.19% 0.32 0.22 13.28 5.18%

East African Breweries Ltd Ord 2.00 790,774,356 188,995,071,084 438,200 0.00% 13.46 8.75 17.76 3.66%

Equity Bank Ltd Ord 0.50 3,702,777,020 87,015,259,970 6,031,500 -1.05% 2.79 1.00 8.42 4.26%

Barclays Bank of Kenya Ltd Ord 0.50 5,431,536,000 79,300,425,600 178,100 0.69% 1.49 1.50 9.80 10.27%

Bamburi Cement Ltd Ord 5.00 362,959,275 61,703,076,750 200 3.03% 14.44 10.00 11.77 5.88%

Standard Chartered Bank Kenya Ltd Ord 5.00 287,077,133 64,018,200,659 3,500 1.36% 19.75 11.00 11.29 4.93%

The Co-operative Bank of Kenya Ltd Ord 1.00 3,492,369,900 44,003,860,740 3,709,200 0.00% 1.53 0.40 8.24 3.17%

Kenya Commercial Bank Ltd Ord 1.00 2,950,259,818 84,819,969,768 4,440,900 0.00% 3.72 1.85 7.73 6.43%

KenGen Co. Ltd Ord. 2.50 2,198,361,456 19,015,826,594 53,300 0.00% 1.28 0.60 6.76 6.94%

British American Tobacco Kenya Ltd Ord 10.00 100,000,000 45,400,000,000 2,800 0.22% 30.98 30.50 14.65 6.72%

Nation Media Group Ltd Ord. 2.50 157,118,572 34,094,730,124 63,400 -0.91% 12.70 8.00 17.09 3.69%

CFC Stanbic of Kenya Holdings Ltd ord.5.00 273,684,211 10,468,421,071 1,800 0.00% 5.99 0.00 6.39 0.00%

Kenya Airways Ltd Ord 5.00 461,615,483 5,747,112,763 334,000 3.75% 3.58 0.25 3.48 2.01%

Mumias Sugar Co. Ltd Ord 2.00 1,530,000,000 9,409,500,000 2,064,100 0.82% 1.32 0.50 4.66 8.13%

Diamond Trust Bank Kenya Ltd Ord 4.00 163,037,108 19,238,378,744 800 -1.67% 13.58 1.70 8.69 1.44%

Kenya Power & Lighting Co Ltd Ord 2.50 633,024,000 11,774,246,400 642,400 0.27% 2.16 0.45 8.61 2.42%

Athi River Mining Ord 5.00 99,055,000 22,584,540,000 54,500 0.44% 11.63 2.00 19.60 0.88%

NIC Bank Ltd Ord 5.00 358,997,784 12,564,922,440 11,500 1.45% 6.72 0.50 5.21 1.43%

970,153,542,707 19,919,800 0.53% 8.19 4.40 10.19 4.30%

GENGHIS MID CAP MARKET SEGMENT

Centum Investment Co Ltd Ord 0.50 604,947,068 7,501,343,643 161,400 1.22% 1.79 0.00 6.93 0.00%

KenolKobil Ltd Ord 0.05 1,471,761,200 20,751,832,920 1,033,400 -0.70% 2.21 1.00 6.38 7.09%

Scangroup Ltd Ord 1.00 284,789,128 16,802,558,552 38,300 0.00% 2.55 0.70 23.14 1.19%

National Bank of Kenya Ltd Ord 5.00 280,000,000 5,180,000,000 4,440,900 0.27% 3.19 0.40 5.80 2.16%

E.A.Portland Cement Co. Ltd Ord 5.00 90,000,000 4,455,000,000 2,500 0.00% 6.24 0.50 7.93 1.01%

TPS Eastern Africa Ltd Ord 1.00 148,210,640 5,706,109,640 3,400 -0.65% 4.51 1.30 8.54 3.38%

Jubilee Holdings Ltd Ord 5.00 54,450,000 8,984,250,000 0 0.00% 33.00 4.50 5.00 2.73%

CMC Holdings Ltd Ord 0.50 582,709,440 7,866,577,440 0 0.00% -0.31 0.00 -43.55 0.00%

Kenya Re Insurance Corporation Ltd Ord 2.50 600,000,000 7,470,000,000 475,000 3.32% 3.19 0.35 3.90 2.81%

Housing Finance Co.Kenya Ltd Ord 5.00 235,750,000 3,548,037,500 52,700 0.00% 2.70 1.20 5.57 7.97%

Total Kenya Ltd Ord 5.00 175,028,706 2,537,916,237 1,400 -0.34% 3.05 0.00 4.75 0.00%

Carbacid Investments Ltd Ord 5.00 33,980,265 4,111,612,065 0 0.00% 8.89 5.00 13.61 4.13%

Pan Africa Insurance Holdings Ltd Ord 5.00 96,000,000 3,720,000,000 412,800 1.97% 2.31 1.00 16.77 2.58%

E.A.Cables Ltd Ord 0.50 253,125,000 2,784,375,000 2,300 0.00% 1.15 1.00 9.57 9.09%

AccessKenya Group Ltd Ord. 1.00 208,084,296 977,996,191 910,600 0.00% 0.53 0.00 8.87 0.00%

Standard Group Ltd Ord 5.00 74,059,026 1,888,505,163 0 0.00% 2.96 0.00 8.61 0.00%

British-American Investments Co (Kenya) Ltd Ord 0.10 2,150,000,000 13,545,000,000 89,800 0.00% -1.09 0.15 -5.78 2.38%

CIC Insurance Group Ltd ord.1.00 2,179,615,440 7,628,654,040 856,100 0.00% 0.27 0.09 17.41 1.91%

Uchumi Supermarket Ltd Ord 5.00 265,424,636 5,029,796,852 639,600 0.80% 1.47 0.00 12.89 0.00%

Trans-Century Ltd Ord 0.50 AIMS 273,950,284 5,615,980,822 13,800 0.00% 1.23 0.25 16.67 1.22%

CFC Insurance Holdings Ltd ord.1.00 515,270,364 3,761,473,657 500 -2.01% 1.84 0.00 3.97 0.00%

Sasini Ltd Ord 1.00 228,055,500 2,542,818,825 5,900 0.00% 1.72 1.00 6.48 8.97%

B.O.C Kenya Ltd Ord 5.00 19,525,446 1,991,595,492 0 0.00% 7.71 6.80 13.23 6.67%

144,401,434,040 9,140,400 0.22% 3.96 1.10 6.81 2.84%

GENGHIS SMALL CAP MARKET SEGMENT

Sameer Africa Ltd Ord 5.00 278,342,393 1,057,701,093 3,200 1.33% 0.35 0.20 10.86 5.26%

Williamson Tea Kenya Ltd Ord 5.00 AIMS 8,756,320 1,838,827,200 200 0.00% 93.74 57.50 2.24 27.38%

Kakuzi Ltd Ord.5.00 19,599,999 1,411,199,928 0 0.00% 28.06 3.75 2.57 5.21%

Rea Vipingo Plantations Ltd Ord 5.00 60,000,000 1,083,000,000 0 0.00% 7.79 1.10 2.32 6.09%

Car & General (K) Ltd Ord 5.00 22,279,616 523,570,976 600 -6.00% 7.78 0.55 3.02 2.34%

Unga Group Ltd Ord 5.00 75,708,873 984,215,349 2,800 -1.14% 2.81 0.75 4.63 5.77%

Crown Paints Kenya Ltd Ord 5.00 23,727,000 895,694,250 2,500 -0.66% 5.44 1.25 6.94 3.31%

Eveready East Africa Ltd Ord.1.00 210,000,000 346,500,000 7,000 0.00% -0.59 - -2.80 0.00%

Eaagads Ltd Ord 1.25 AIMS 16,078,500 795,885,750 0 0.00% 1.36 1.25 36.40 2.53%

City Trust Ltd Ord 5.00 AIMS 5,728,314 1,976,268,330 161,400 0.00% 6.12 4.00 56.37 1.16%

Longhorn Kenya Ltd Ord 1.00 AIMS 58,500,000 585,000,000 600 2.00% 2.33 1.50 4.38 14.71%

Kapchorua Tea Co. Ltd Ord Ord 5.00 AIMS 3,912,000 469,440,000 200 -4.00% 19.93 7.50 6.02 6.25%

The Limuru Tea Co. Ltd Ord 20.00 AIMS 1,200,000 540,000,000 200 0.00% 33.70 7.50 13.35 1.67%

Express Kenya Ltd Ord 5.00 AIMS 35,403,790 141,615,160 49,500 0.00% -6.47 - -0.62 0.00%

Olympia Capital Holdings Ltd Ord 5.00 40,000,000 140,000,000 8,500 -2.78% 0.38 0.10 9.21 2.86%

Marshalls (E.A.) Ltd Ord 5.00 14,393,106 188,549,689 0 0.00% -11.80 - -1.11 0.00%

Kenya Orchards Ltd Ord 5.00 AIMS 12,868,124 38,604,372 0 0.00% 0.04 - 75.00 0.00%

13,016,072,097 236,700 -0.66% 11.23 5.11 13.46 4.97%

GENGHIS LARGE CAP MARKET SEGMENT EPS DPS P/EPrice Change Total Shares Traded

Daily Market Note

7

Contacts Report By: Moses Waireri,Research Analyst | Tel:+254 20 2774781 | Email: mwaireri@genghis-capital.com

Report By: Evelyne Wanjiku, Research Analyst | Tel:+254 20 2774781 | Email: ewanjiku@genghis-capital.com Anthony Kimani, Research Analyst | Tel:+254 20 2774781 | Email: akimani@genghis-capital.com

Carol Matu, Head Dealer | Tel: +254 20 2774789 | Email: cmatu@genghis-capital.com Gachanja Weru, Fixed Income Dealer| Tel:+25420 2774756 | Email: gweru@genghis-capital.com

George Guy,Fixed Income Dealer | Tel:+254 20 2774756| Mob: +254 727 142231 | Email: gguy@genghis-capital.com Nyawira Waithaka, Equity Dealer | Tel:+254 20 2774777 | Mob: +254 723 693481 | Email: nwaithaka@genghis-capital.com Andrew Maina, Senior Equity Dealer | Tel:+254 20 2774789 | Mob: +254 722 667936 | Email: amaina@genghis-capital.com

Disclaimer: The content provided on this document is provided as general information and does not constitute advice or recommendation by Genghis Capital

Ltd and should not be relied upon for investment decisions or any other matter and that this document does not constitute a distribution recommending the

purchase or sale of any security or portfolio. Please note that past performance is no indication of future results. The ideas expressed in the document are

solely the opinions of the author at the time of publication and are subject to change without notice. Although the author has made every effort to provide

accurate information at the date of publication all information available in this report is provided without any express or implied warranty of any kind as to

its correctness. You should consult your own independent financial adviser to obtain professional advice before exercising any decisions based on the

information present in this document. Any action that you take as a result of this information, analysis, or advertisement is ultimately your responsibility.

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