Secondary Turnover Slightly Dips To 1.5 Billion Shillings

Secondary market turnover declined slightly to 1.52Bn with executed trades mainly on the long-end segment during the session on Wednesday.

The result of the TAP Sale for IFB1/2018/20yr was resulted showing an under-performance at 8.73 billion shilling bids – against 22.41 billion shillings offered – and fell in line with our expectation.

The CBK intervened in the market to mop out excess liquidity. Bids received were 10.5 billion shillings but the regulator accepted 10.0 billion shillings at a weighted average rate of 8.61 percent.

Average inter-bank rate edged up 7bps to 5.79 percent on Wednesday with CBK also acting as a lender of last resort via its discount window facility.

The KES gained marginally against USD to close at 102.60 which was partly supported by the CBK liquidity mop-up.

NIC Group Q3 Results

NIC Group Plc (NSE: NIC) announced a 4.1 percent y/y drop in 3Q18 profit after tax to 3.2 billion shillings.

Net interest income (NII) fell 5.9 percent y/y while Non-Interest Revenue grew by 7.2 percent y/y leaving operating income slightly down 2.2 percent y/y to 11 billion shillings.

Total operating expenses were muted (-2.1% y/y) at 6.7 billion shillings mainly attributed to a 25.4 percent y/y decline in Loan Loss Provisions (LLP).

Staff costs grew 8.8 percent y/y while other operating expenses also rose 8.4 percent y/y. Deposits grew 10.3 percent y/y while the loan book shrank by 3.1 percent y/y to 114.9 billion shillings. 

“We maintain our BUY recommendation on NIC at a target price of 34.89 shillings. This represents an upside potential of 54.0 percent from the current market price of 22.65 shillings,” said analysts from Genghis Capital.

What To Expect On The Session On Thursday

Trading is still slow in the market with no clear movement as the holiday season starts to creep in. Trades are on the key index counters; Safaricom, Equity and KCB and the trend is expected to continue into the end of the week. No major movements in price expected on the counters with thin spreads on bids-asks for most shares.