Market Turnover Shoots Up To KES 3.1 Billion on Wednesday

Market turnover shot up on Wednesday to 3.1 billion shillings as turnover continued to be driven by medium-term papers and the new infrastructure bond.

Market analysts from Genghis Capital say that they expect the activity to remain high in Thursday’s session but to slow down from Friday.

The Central Bank of Kenya finally announced the TAP Sale of IFB1/2018/20, with a period of sale running to 27^th November.

The amount on offer is 22.41 billion shillings at the yield of 12.156 percent. The money market continued to tighten with the KES overnight rate rising to 4.5 percent as the regulator continued to sit out in support of the shilling.

The local unit closed at 102.8 with the recent pressure seeming to have abated and we expect a stable run to the end of the month.

Diamond Trust Bank

Diamond Trust Bank Kenya released 3Q18 financial results reporting a 10.0 percent increase in Profit after Tax (PAT) to 5.6 billion shillings (EPS 18.76 shillings) from 5.1 billion shillings (EPS 17.42) in 3Q17.

The increase was buoyed by Net Interest Income (NII) which grew 2.9 percent y/y to 14.9 billion shillings coupled with Non-interest Revenue (NIR) that grew 6.3 percent y/y to 4.1 billion shillings.

Consequently, operating income was up 3.6 percent y/y to 19.0 billion shillings. Total operating expenses were muted (-0.1% y/y) at 10.8 billion shillings despite a 4.3% y/y rise in staff costs to 3.1 billion shillings.

The Loan Loss Provisions (LLP) declined 17.3 percent y/y to 2.4 billion shillings. Deposits rose 6.5 percent y/y (0.2% q/q) and, consequently, the balance sheet grew 7.8 percent y/y (2.4% q/q).

The loan book remained depressed (0.7 percent y/y) at 197.7 billion shillings as an investment in government securities surged 17.7 percent y/y.

“We recommend a BUY on Diamond Trust Bank at a target price of KES 183.43. This represents an upside potential of 22.3% from the current market price of KES 150.00,” said analysts from Genghis.