5

Daily Market Note Bloomberg: GNCP <GO>

www.genghis-capital.com 23

rd October 2012

Equities

NSE Inches Closer to 4,100…

The NSE 20 share index edged 18.71 points upwards to 4,072.50. The NASI was up 0.27 points as both the FTSE 15 and 25 kept

the pace appreciating by 0.96% and 0.90% respectively. Equity turnover had a 17% improvement to Kes.649Mn with bond

turnover following suit up 43% . Foreign investors maintained their long position at a reduced net inflow of Kes.69.3Mn thou

still dominating over the local investors, contributing 66% of total NSE turnover. Market capitalisation was increased to

Kes.1.19Tn. 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 89.51 89.78 0.30%

NSE 20 Share 4053.79 4072.50 0.46%

FTSE NSE 15 119.04 120.18 0.96%

FTSE NSE 25 121.71 122.81 0.90%

Source: NSE

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

session stood at 23/14 with 23 stocks advancing in price and 14

shedding prices.

Foreign investor participation was up to 65.66% in today’s

trading compared t0 48.64% at the close of yesterday’s

session.

Today’s session resulted in a net inflow of Kes.68.3Mn

compared to a net inflow of Kes.112.5Mn at the close of the

previous trading session.

The highest foreign investor turnover was recorded on East

African Breweries Ltd (NSE: EABL)–Kes.311.9Mn and Kenya

Commercial Bank Ltd (NSE: EQTY)–Kes.58.8Mn. The 2 counters

accounted for 57.15% and 87.05% of the total NSE and total

foreign activity respectively.

East African Breweries Ltd (NSE: EABL) recorded the highest

net inflow of Kes.25.1Mn.

The highest net outflow was recorded on Equity Bank

Ltd (NSE: EQTY) at Kes.5.1Mn.

Top Traders

Equity Volume

The Co-operative Bank (K) Ltd 3,117,600

Equity Bank Ltd 2,821,600

Mumias Sugar Company Ltd 1,930,100

Kenya Power & Lighting Co. Ltd 1,496,800

East African Breweries Ltd 1,404,300

Gaining Stocks

Equity Price (KES) % Change

Pan Africa Insurance 41.75 7.74

Eveready East Africa 1.70 3.03

Kakuzi Ltd 73.50 2.08

Standard Group Ltd 26.00 1.96

Williamson Tea (K) Ltd 214.00 1.90

Losing Stocks

Equity Price (KES) % Change

Eaagads Ltd 44.75 -9.60

CFC Insurance Holdings 7.00 -4.11

Car & General (K) Ltd 22.75 -3.19

Trans-Century Ltd 20.00 -2.44

Kenya Re Insurance Ltd 12.15 -2.41

Source: NSE *Closing Prices

Daily Market Note

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Table 3: NSE Summary

Source: NSE & Genghis Capital Estimates

Table 4: Foreign Equity Turnover

Source: NSE & Genghis Capital Dealers

The Banking sector was up 0.67% to the top spot, boosted by the performance of National Bank of

Kenya Ltd (NSE: NBK) gaining 1.89% to VWAP 18.85. The total index performance was down to 0.05% on

the greater effect of four sectors losing value.

The Investment sector occupied the bottom spot losing 0.94% dragged down by Trans-Century Ltd

(NSE: TCL) which shed 2.44% to close at a VWAP of Kes.20.00.

Table 5: Daily Segmental Price Performance Analysis

Foreign Investor Equity Turnover

22nd October 2012 23rd October 2012

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

190,994,500.00 78,538,882.50 247,085,787.50 178,750,365.00

Net Inflow/(Outflow) Position

112,455,617.50 Net Inflow/(Outflow) Position

68,339,422.50

Sector Constituents Price Performance (% Change)

Banking 10 0.67

Energy & Petroleum 4 0.47

Construction & Allied 5 0.43 Manufacturing & Allied 9 0.36

Commercial & Services 9 0.35

Insurance 6 0.07

Automobiles & Accessories 4 -0.47

Telecommunication & Technology 2 -0.53

Agricultural 7 -0.87

Investment 4 -0.94

Total Index 60 -0.05

Source: NSE & Genghis Capital

22nd Oct 2012 23rd Oct 2012 % Change

Market Cap. (Kes.Bn) 1176.27 1192.04 1.34%

Equity T/O: (Kes.Mn) 554.17 648.56 17.03%

Local/Foreign Equity T/O: (%) 51.36/48.64 34.34/65.66 N/A

Advance:Decline Ratio 17:12 23:14 N/A

Bond T/O: (Kes.Mn) 2091.00 2992.80 43.13%

Sell/Buy Back Transactions T/O:

(Mn)0.00 350.00 N/A

Sell/Buy Back Transactions (% of

Total Bond T/O)0.00% 11.69% 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 12.45 36.32% -14.43% 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 35.25 22.53% 33.02% BUY

EA Cables Ltd 11.80 14.55 11.05 24.05% -6.36% BUY

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

Diamond Trust Bank Ltd 88.50 123.40 119.00 3.57% 34.46% HOLD

KCB Group Ltd 18.50 27.10 29.25 -7.93% 58.11% HOLD

Uchumi Supermarkets Ltd 7.20 18.25 19.20 -5.21% 166.67% HOLD

Kenya Power & Lighting Co. 15.85 22.00 18.95 13.86% 19.56% BUY

Nation Media Group Ltd 153.00 197.70 216.00 -9.26% 41.18% HOLD

British American Investments 4.00 6.25 6.25 0.00% 56.25% HOLD

Bamburi Cement Ltd 168.00 201.00 170.00 15.42% 1.19% BUY

Cooperative Bank Limited 11.55 18.50 12.65 31.62% 9.52% BUY

Kenya Reinsurance Corp. 10.05 15.35 12.15 20.85% 20.90% BUY

KenGen Ltd 8.30 16.25 8.80 45.85% 6.02% BUY

Jubilee Holdings Ltd 163.00 186.00 165.00 11.29% 1.23% HOLD

Housing Finance Ltd 13.65 27.00 15.10 44.07% 10.62% BUY

Scangroup Ltd 49.25 59.60 59.50 0.17% 20.81% HOLD

Portfolio Return 31.45%

Source: Genghis Capital Ltd

Fixed Income:

Yield Uptick to Prevail…

Money Markets: The CBK was aggressive in the market mopping up Kes.8Bn via REPOs with the interbank rate slipping to 9.22%.

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. Yields are expected to continue

with the uptick.

Secondary Markets: Bond turnover ascended 43% to Kes.3Bn driven by IFB Bonds that transacted

Kes.1.18Bn; 40% 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:

Importers Pose Downward Pressure…

Performance: The KES marginally slipped as importers demand outweighed support offered

by the tea bonus payments. The only gains were o.10% in the GBP/KES pair and 0.056%

against the UGX. The largest loss was 0.25% in the KES/TZS pair followed by 0.13% in the

INR/KES pair.

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.

Genghis Index:

Currency Pair 22nd Oct 2012 23rd Oct 2012

USD/KES 85.18 85.23

GBP/KES 136.64

136.50

EUR/KES 111.25 111.29

ZAR/KES 9.85 9.86

KES/UGX 30.29 30.31

KES/TZS 18.57 18.53

INR/KES 1.59 1.59

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

Estimates

27thJan 2012 30thJan 2012

Daily Market Note

5

D

Table 9: Genghis Index Performance

Source: Genghis Capital

Large-Cap Index

The index ascended 0.39% while Market Capitalisation

surged to Kes.973Bn.

The best performing counter in this segment was

Kenya Airways Ltd (NSE: KPLC) up 1.88%.

Losing by the biggest margin was Standard Chartered

Bank Ltd (NSE: SCBK) down 0.90%.

Mid-Cap Index

The Index to gained 0.17% over yesterday’s close as

Market Capitalisation marginally was stable at

Kes.144Bn.

This section’s best performer was Pan Africa

Insurance Ltd (NSE: PANFR) up 7.74%.

Losing by the biggest margin was CFC Insurance

Holdings Ltd (NSE: CFCI) down 4.11%.

Small-Cap Index

Price performance shifted -0.31% with market

capitalization stable at Kes.13Bn.

Gaining by the biggest margin was Kakuzi Ltd (NSE:

KUKZ) up 2.08%.

Losing by the biggest margin was Eaagads Ltd (NSE:

EGDS) shedding 9.60%.

Daily Market Note

6

Total Mkt Cap. Dividend

Shares Outstanding Kshs Mn. Yield - %

Safaricom Ltd Ord 0.05 40,000,000,000 170,000,000,000 474,000 0.00% 0.32 0.22 13.28 5.18%

East African Breweries Ltd Ord 2.00 790,774,356 188,995,071,084 1,404,300 0.00% 13.46 8.75 17.76 3.66%

Equity Bank Ltd Ord 0.50 3,702,777,020 87,015,259,970 2,821,600 0.00% 2.79 1.00 8.42 4.26%

Barclays Bank of Kenya Ltd Ord 0.50 5,431,536,000 80,658,309,600 1,285,200 1.71% 1.49 1.50 9.97 10.10%

Bamburi Cement Ltd Ord 5.00 362,959,275 61,703,076,750 2,300 0.00% 14.44 10.00 11.77 5.88%

Standard Chartered Bank Kenya Ltd Ord 5.00 287,077,133 63,444,046,393 6,700 -0.90% 19.75 11.00 11.19 4.98%

The Co-operative Bank of Kenya Ltd Ord 1.00 3,492,369,900 44,178,479,235 3,117,600 0.40% 1.53 0.40 8.27 3.16%

Kenya Commercial Bank Ltd Ord 1.00 2,950,259,818 86,295,099,677 304,100 1.74% 3.72 1.85 7.86 6.32%

KenGen Co. Ltd Ord. 2.50 2,198,361,456 19,345,580,813 363,200 1.73% 1.28 0.60 6.88 6.82%

British American Tobacco Kenya Ltd Ord 10.00 100,000,000 45,500,000,000 58,600 0.22% 30.98 30.50 14.69 6.70%

Nation Media Group Ltd Ord. 2.50 157,118,572 33,937,611,552 33,700 -0.46% 12.70 8.00 17.01 3.70%

CFC Stanbic of Kenya Holdings Ltd ord.5.00 273,684,211 10,468,421,071 1,000 0.00% 5.99 0.00 6.39 0.00%

Kenya Airways Ltd Ord 5.00 461,615,483 5,747,112,763 241,600 0.00% 3.58 0.25 3.48 2.01%

Mumias Sugar Co. Ltd Ord 2.00 1,530,000,000 9,333,000,000 1,930,100 -0.81% 1.32 0.50 4.62 8.20%

Diamond Trust Bank Kenya Ltd Ord 4.00 163,037,108 19,401,415,852 20,000 0.85% 13.58 1.70 8.76 1.43%

Kenya Power & Lighting Co Ltd Ord 2.50 633,024,000 11,995,804,800 1,496,800 1.88% 2.16 0.45 8.77 2.37%

Athi River Mining Ord 5.00 99,055,000 22,584,540,000 74,400 0.00% 11.63 2.00 19.60 0.88%

NIC Bank Ltd Ord 5.00 358,997,784 12,654,671,886 72,500 0.71% 6.72 0.50 5.25 1.42%

973,257,501,445 13,707,700 0.39% 8.19 4.40 10.22 4.28%

GENGHIS MID CAP MARKET SEGMENT

Centum Investment Co Ltd Ord 0.50 604,947,068 7,531,590,997 437,400 0.40% 1.79 0.00 6.96 0.00%

KenolKobil Ltd Ord 0.05 1,471,761,200 20,751,832,920 1,231,600 0.00% 2.21 1.00 6.38 7.09%

Scangroup Ltd Ord 1.00 284,789,128 16,944,953,116 166,800 0.85% 2.55 0.70 23.33 1.18%

National Bank of Kenya Ltd Ord 5.00 280,000,000 5,278,000,000 304,100 1.89% 3.19 0.40 5.91 2.12%

E.A.Portland Cement Co. Ltd Ord 5.00 90,000,000 4,500,000,000 1,000 1.01% 6.24 0.50 8.01 1.00%

TPS Eastern Africa Ltd Ord 1.00 148,210,640 5,706,109,640 0 0.00% 4.51 1.30 8.54 3.38%

Jubilee Holdings Ltd Ord 5.00 54,450,000 8,984,250,000 2,800 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 7,290,000,000 32,100 -2.41% 3.19 0.35 3.81 2.88%

Housing Finance Co.Kenya Ltd Ord 5.00 235,750,000 3,559,825,000 96,000 0.33% 2.70 1.20 5.59 7.95%

Total Kenya Ltd Ord 5.00 175,028,706 2,494,159,061 225,200 -1.72% 3.05 0.00 4.67 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 4,008,000,000 284,000 7.74% 2.31 1.00 18.07 2.40%

E.A.Cables Ltd Ord 0.50 253,125,000 2,797,031,250 33,900 0.45% 1.15 1.00 9.61 9.05%

AccessKenya Group Ltd Ord. 1.00 208,084,296 967,591,976 4,300 -1.06% 0.53 0.00 8.77 0.00%

Standard Group Ltd Ord 5.00 74,059,026 1,925,534,676 300 1.96% 2.96 0.00 8.78 0.00%

British-American Investments Co (Kenya) Ltd Ord 0.10 2,150,000,000 13,437,500,000 80,500 -0.79% -1.09 0.15 -5.73 2.40%

CIC Insurance Group Ltd ord.1.00 2,179,615,440 7,628,654,040 332,500 0.00% 0.27 0.09 17.22 1.94%

Uchumi Supermarket Ltd Ord 5.00 265,424,636 5,096,153,011 588,900 1.32% 1.47 0.00 13.06 0.00%

Trans-Century Ltd Ord 0.50 AIMS 273,950,284 5,479,005,680 135,900 -2.44% 1.23 0.25 16.26 1.25%

CFC Insurance Holdings Ltd ord.1.00 515,270,364 3,606,892,548 1,700 -4.11% 1.84 0.00 3.80 0.00%

Sasini Ltd Ord 1.00 228,055,500 2,531,416,050 23,200 -0.45% 1.72 1.00 6.45 9.01%

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%

144,488,284,962 3,982,200 0.17% 3.96 1.10 6.86 2.83%

GENGHIS SMALL CAP MARKET SEGMENT

Sameer Africa Ltd Ord 5.00 278,342,393 1,071,618,213 2,100 1.32% 0.35 0.20 11.00 5.19%

Williamson Tea Kenya Ltd Ord 5.00 AIMS 8,756,320 1,873,852,480 2,600 1.90% 93.74 57.50 2.28 26.87%

Kakuzi Ltd Ord.5.00 19,599,999 1,440,599,927 2,400 2.08% 28.06 3.75 2.62 5.10%

Rea Vipingo Plantations Ltd Ord 5.00 60,000,000 1,083,000,000 700 0.00% 7.79 1.10 2.32 6.09%

Car & General (K) Ltd Ord 5.00 22,279,616 506,861,264 9,400 -3.19% 7.78 0.55 2.92 2.42%

Unga Group Ltd Ord 5.00 75,708,873 991,786,236 29,800 0.77% 2.81 0.75 4.66 5.73%

Crown Paints Kenya Ltd Ord 5.00 23,727,000 901,626,000 8,100 0.66% 5.44 1.25 6.99 3.29%

Eveready East Africa Ltd Ord.1.00 210,000,000 357,000,000 11,900 3.03% -0.59 - -2.88 0.00%

Eaagads Ltd Ord 1.25 AIMS 16,078,500 719,512,875 800 -9.60% 1.36 1.25 32.90 2.79%

City Trust Ltd Ord 5.00 AIMS 5,728,314 1,941,898,446 437,400 -1.74% 6.12 4.00 55.39 1.18%

Longhorn Kenya Ltd Ord 1.00 AIMS 58,500,000 596,700,000 300 -0.49% 2.33 1.50 4.36 14.78%

Kapchorua Tea Co. Ltd Ord Ord 5.00 AIMS 3,912,000 469,440,000 400 0.00% 19.93 7.50 6.02 6.25%

The Limuru Tea Co. Ltd Ord 20.00 AIMS 1,200,000 540,000,000 0 0.00% 33.70 7.50 13.35 1.67%

Express Kenya Ltd Ord 5.00 AIMS 35,403,790 141,615,160 0 0.00% -6.47 - -0.62 0.00%

Olympia Capital Holdings Ltd Ord 5.00 40,000,000 140,000,000 0 0.00% 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%

13,002,664,661 505,900 -0.31% 11.23 5.11 13.20 4.95%

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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