NIC Bank to Issue Fewer Credit Cards

In the aftermath of the amended banking law, NIC Bank (NSE: NIC) will now issue fewer credit cards and may demand collateral in some cases. This is following the Banking (Amendment) Law that came into effect on August 24th 2016, aiming to regulate interest rates applicable to banks’ loans and deposits. The credit card business accounts for KES 100 million of NIC’s annual revenue.

NIC’s strategy is in line with our expectations as most banks have been revaluating on how to tackle the new development. The share price closed at KES 26.50 down from KES 26.25 on Friday. The stock is currently trading at a discount, with P/E and P/B multiple at 3.73x and 0.61x against an industry average of 5.32x and 0.93x respectively.

Equities

The bourse closed in a mixed state during Monday’s trading session with some of the indices pointing south.

The NSE-25 Share Index was in the green territory; edging up by 0.17 percent to close at 3648.71 points whilst the NSE-20 Share Index declined by 0.07 percent to close at 3258.93 points. The Nairobi All Share Index (NASI) plunged marginally by 0.01 percent to close at 138.15 points.

Market capitalization was down, 0.02 percent to clinch at 2,001.51 billion shillings whilst equity turnover bucked the trend, appreciating by 195.71 percent to 1.01 billion shillings. The advancers outweighed the decliners resulting in an A/D ratio of 1.13x.

Trading Floor

Safaricom Ltd (NSE: SCOM) was the most actively traded stock on Monday accounting for 76.04 percent of the total market value traded activity. Equity Group Ltd (NSE: EQTY) also registered high levels of activity, accounting for 13.00 percent of the total market turnover.

Trans-Century Ltd (NSE: TCL) topped the gainers chart, posting an 8.43 percent increase to close the day at 9.65 shillings. Home Afrika Ltd (NSE: HAFR) followed suit, registering an 8.53 percent gain to close at 1.30 shillings.

Limuru Tea Company Ltd (NSE: LIMT) emerged as the top laggard of the day, plummeting by 8.77 percent to close at 593.00 shillings. WPP ScanGroup Ltd (NSE: SCAN) similarly lost ground by 6.32 percent to close at 17.05 shillings.

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