8th Aug 2016
JUBILEE HOLDINGS
INITIAL COVERAGE
KCB Capital 1 8th Aug 2016
JUBILEE HOLDINGS LONG TERM BUY
Jubilee Holdings Limited is an investment holding company. The Company, through its KEY STATS subsidiaries, transacts all classes of general and long term insurance business. Jubilee
Insurance is also the largest provider of medical insurance across East Africa that in-
cludes many of the region’s blue chip companies. Reuters Code JUB.NR
The Company's operating segments include Kenya, Uganda, Tanzania, Burundi and Current price (kshs) 474.00 Mauritius within which there are three segments classified according to products and Target Price (Ksh) 603.33 services, such as General, including Medical, Ordinary, Group Life & Pensions and In-
vestments. Its classes of General Insurance include Engineering insurance, Fire insur- Upside 27.3% ance-domestic risks, Liability insurance and miscellaneous insurance, among others. P/E 10.95 Medical insurance means the business of affecting and carrying out contracts of insur-
ance against costs of otherwise non-recoverable medical and surgical expenses incurred P/B 1.64
by a member as a direct result of sustaining accidental bodily injury. Its Ordinary & Group Div. Yld 1.79% Life includes insurance business of classes, such as life assurance business, superannu- ROE 23.0 ation business and business incidental. EV / EBITDA 9.83 The Group’s strategy of diversifying its investment and asset base provided an impres- 52Week Range (KSH) 384-576 sive investment income growth projection of 31 per cent . Profit before tax grew by 5% to
Kshs 4.15 billion attributed to growth in returns from the investments in associates, un- Mkt Cap (KES Bn) 31.6
derwriting profits as well as better returns to shareholders from the life business. Shares Outstanding ML) 65.6
Gross Written Premiums grew by 2% to Kshs 30.16 billion. This growth was mainly sup-
ported by the medical and individual life lines of business which grew by 32% and 14%
respectively SHARE PRICE VS NSE 20
Life insurance business Gross Written Premium and Deposit Administration inflows regis- 4,100.00 490 tered a drop to Kshs 9.61 billion (2014: Kshs 11.59 billion) as the exceptionally strong 4,000.00 485 3,900.00 480 475 growth in annuity business in 2014 was not repeated in 2015 as expected. 3,800.00 470 3,700.00 465 3,600.00 The business and regulatory environment is expected to remain challenging influenced 460 3,500.00 455 by global economic trends and local events. Potential risks arising from the volatility of 3,400.00 450
the global markets and exchange rates could have a negative impact on capital flows.
NSE 20 PRICE Recent bank closures in Kenya has undermined confidence in the financial sector and
resulted in increased lending rates putting pressure on economic growth. Interest rates Source :Reuters & KCB Analysis are expected to come down in the latter part of the year which may spur growth in the
region’s economy which is expected to be supported by lower energy costs, investment
in infrastructure, growth in financial services, telecommunications, manufacturing and
other industries. These factors and growth in the economy will continue to generate
growth in the insurance industry.
KCB Capital 2 8th Aug 2016
JUBILEE HOLDINGS LONG TERM BUY
Segment Performance
Medical insurance business achieved a strong growth in gross premiums of
32% to reach Kshs 10.03 billion (2014: Kshs 7.62 billion). This is despite NET PREMIUMS 2014 fraud and increased coast of medical services. Jubilee continues to pene- Other trate new markets and client segment to consolidate and enlarge its market 2% Pension Motor 21% leadership in medical insurance business throughout the region . 20%
Group Life Fire 5% 4% Jubilee’s retail medical product, J-Care, tailored for families continued to do Accident well during the year under review and this contributed towards the positive 7% Ordinary Life medical business performance. Despite a hash medical insurance environ- 12%
ment, which was characterized by increase in prices of medicine and high Medical 29% claims, jubilee managed to post growth due to the retail position its taken in
this segment, that witnessed less claims than the higher corporate segment
of the medical insurance segment. NET PREMIUMS 2015 General insurance Gross Written Premium recorded growth of 3% in 2015 Group Life Pension Other 4% 2% 2% Motor to reach Kshs 10.52 billion, as several large infrastructure projects in the Ordinary Life 24% 15% region were delayed and Jubilee took steps to withdraw from unprofitable
segments until regional premium rates return to sustainable levels. The Fire 4% Group continues to implement strategies to improve operating efficiency and Accident launch innovative new products, especially those targeted towards Small 11%
and Medium Enterprises, and to make insurance more accessible to rural Medical 38% communities.
Source KCB capital Analysis & Company Reports The long-term claim rate averages 45 percent while the short-term business
averaged 62 percent as a result of medical insurance.
Jubilees growth, both historical and future are anchored on its position in
medical insurance ,innovation in this segment and operational efficiency
have seen jubilee post growth despite unfavorable market conditions.
2015 2014 % Change % Change SEGMENT Net Premiums Net Claims Net Premiums Net Claims Premiums Claims Motor 3,526,955 2,380,815 3,531,919 2,196,163 0% 8% Fire 570,347 152,697 608,863 134,538 -6% 13% Accident 1,642,189 641,119 1,110,998 968,983 48% -34% Medical 5,621,264 4,101,826 4,741,399 3,264,253 19% 26% Ordinary Life 2,292,366 622,721 2,013,297 678,861 14% -8% Group Life 697,069 487,434 762,458 321,164 -9% 52% Pension 271,122 744,107 3,278,792 420,879 -92% 77% Other 254,845 90,639 283,495 126,376 -10% -28% TOTAL 14,876,157 9,221,358 16,331,221 8,111,217 -9% 14%
Source KCB capital Analysis & Company Reports
KCB Capital 3 8th Aug 2016
Case for Jubilee
Jubilee is a BUY based on the fact that it’s a market leader and stands a P.A.T better chance to benefit from any growth in the market as long as it maintains 0.35 5,000.00 0.3 its position as far as market share is concerned. Despite the highest P/E and 4,500.00 0.25 4,000.00 above market P/B we advise that clients who already have the stock in their 0.2 3,500.00 0.15 portfolio to HOLD as we project growth in earnings with a projected EPS of 3,000.00 0.1 2,500.00 KSh 44 per share. 0.05 0 2,000.00 -0.05 2010A 2011A 2012A 2013A 2014A 2015A 2016F 2017F 2018F 2019F 1,500.00 The company management has emphasized the need to continue to focus on -0.1 1,000.00 risk selection and best management practices so as to balance entrepreneurial PAT Y-O-Y approach to business opportunities whilst protecting profitability.
We attributed the firm’s market grip to innovation by launching new products, bancassurance and prompt payment of claims. The partnership with CITADEL
Micro Insurance and Umande aimed at boosting the insurer’s portfolio, invest- NET CLAIMS ment in information Communication and Technology, Bancassurance through
its partners with Barclays Bank of Kenya, Standard Chartered Bank and Dia- 20,000.00 50% mond Trust Bank, market leadership and regional presence are expected to 18,000.00 40% 16,000.00 30% contribute to a positive bottom-line for the company. 14,000.00 20% 12,000.00 10% 10,000.00 0% 8,000.00 Under product development, the insurer launched the ‘Tumaini ya Jamii’ 6,000.00 -10% 4,000.00 -20% life insurance product, which aims to make insurance more accessible for lower 2,000.00 -30% - -40% income groups, and a 24hr PSV passengers’ medical cover named ‘Jubilee 2011A 2012A 2013A 2014A 2015A 2016F 2017F 2018F
Msafiri’, which is a benefit designed to cover travelers while on a long distance NET CLAIMS Y-O-Y
bus journey within East Africa. In addition, Jubilee also launched Lady Jubilee in
Kenya and Tanzania, the first motor insurance product that offers cash back re-
wards to accident free drivers and which is designed specifically to meet the Gross-Premium insurance needs of Ladies.
40,000.00 50%
35,000.00 The company also expanded its presence into Democratic Republic of Congo 40% 30,000.00 30% where it plans to tap high demand for cover in the country. The insurer has part- 25,000.00 nered with State-owned insurance company Sonas to offer medical and life cov- 20,000.00 20% 15,000.00 10% er products. The company is eyeing acquisitions both in Kenya and in the region 10,000.00 0% 5,000.00 to expand its presence. The buyouts will be mainly funded through internally - -10% 2011A 2012A 2013A 2014A 2015A 2016F 2017F 2018F generated cash and external borrowing, Jubilee Insurance currently has opera-
tions in Kenya, Uganda, Tanzania, Burundi and Mauritius, with the firm being the Gross-Premiums Y-O-Y
market leader in some of these markets. Source : KCB Capital & Company Reports
Market Leader : Kenya’s largest general insurer with a market share of 11.2 percent in June 2015, up from 10.5 percent at the same time in 2014 is a prudent
investment choice as we expect greater achievements in 2016. Jubilee’s strong
market grip is attributed to innovation, bancassurance and prompt payment of
claims. Jubilee Holdings has maintained its number 1 position in Medical busi-
ness, short term business, pension segments and remained the overall number 1
insurer in Kenya, Uganda, Tanzania and East Africa.
KCB Capital 4 8th Aug 2016
VALUATION
Residual Income Approach Equity assumptions Market risk-free rate 10.2%Average long term 10 yr government bond yield Default spread for B rated country 2% Market risk premium 6% Beta 1.00 Cost of equity 18.2%
Terminal Value assumptions Terminal ROE 28.8% Terminal growth rate 5.0%
PV excess returns 2016F 2017F 2018F 2019F 2020F Residual income 2,125 2,972 3,436 4,739 6,563 Period 0.50 1.50 2.50 3.50 4.50 Discounting factor 0.92 0.78 0.66 0.56 0.47 58,765 PV of excess returns 1,955 2,313 2,262 2,639 30,784
Value per share Current book value of equity 20,380 PV excess returns 39,953 PV of equity 60,333 Number of shares 100 Value per share 603.33 Current price per share 474.00
Upside 27.3%
Target price 603.33 Upside 27.33
KCB Capital 5 8th Aug 2016
Company Current Price Target price Upside Dividend Yield Total Return Rank
Pan Africa 39.75 64.23 61.6% 0.0% 62% 1
CIC Group 4.20 5.64 34.3% 1.0% 35% 2
Liberty Kenya 14.30 19.31 35.0% 0.0% 35% 3
Jubilee Holdings 474.00 585.19 27.3% 1.8% 29.1% 4
BRITAM 12.80 13.49 5.4% 0.5% 6% 5
*Prices As at 8th August 2016
Income Statement 2012 2013 2014 2015 2016F 2017F 2018F
Gross Earned Premium 15,400 18,088 24,782 23,030 28,700 34,773 41,785
Less: Reinsurance (6,027) (7,315) (8,451) (8,154) (10,766) (13,080) (15,614)
Net Insurance Premium 9,373 10,773 16,331 14,876 17,934 21,693 26,171
Commission Earned 1,353 1,684 1,976 1,838 2,235 2,725 3,337
Investment Income 3,157 3,697 4,834 6,093 7,512 9,232 11,449
Total Income 14,327 18,042 24,376 21,698 28,314 34,636 42,155 Claims and policyholder benefits payable 12,198 16,636 20,482 16,355 17,335 20,814 24,453
Net Insurance Benefits and claims 8,555 10,986 15,870 11,565 12,339 14,692 17,367
Commissions payable 2,021 2,345 2,881 3,134 3,912 4,749 5,748
Profit before Tax 1,499 2,179 2,468 3,093 7,563 9,776 12,511
Tax Expense (409) (648) (846) (1,024) (2,229) (3,009) (3,938)
PAT 2,285 2,502 3,104 3,121 5,835 7,244 8,965
Balance Sheet 2012 2013 2014 2015 2016F 2017F 2018F
Assets
Property &Equipment 979 1,208 1,339 1,612 1,612 1,612 1,612
Total Assets 47,258 61,159 74,505 82,378 85,563 90,854 96,227
Liabilities
insurance liabilities 12,188 15,113 19,644 18,709 18,709 18,709 18,709
Total Liabilities 38,559 47,820 58,027 61,997 75,748 80,021 84,661
Source: KCB Capital Analysis
KCB Capital 6 8th Aug 2016
INSURANCE SECTOR OVERVIEW
The level of insurance penetration, measured as a percentage of premiums to GDP for Africa sits at 3.5%. This is relatively higher than the emerging markets’ average of 2.72%, but much lower than the average for advanced markets of 8.27%, and the global average of 6.28%.
South African premiums accounted for 1.17% world market share. Penetration levels stand at 15.4%, which ranked 2nd in the world, quite high is even compared to advanced markets. The insurance industry in Kenya has seen a lot of foreign interest in the industry mainly due to the high average market return of about 20 percent compared to a penetration level of 3 percent, offering potential investors vast opportunities for growth.
The most attractive mix of market rewards and risk can be found in Zambia, Ghana, and Kenya through 2018.
Trend in some key insurance indicators Years Item 2011 2012 2013 2014 2015 Gross Premium Income 91,806,432.60 111,911,369.83 135,384,923.00 157,732,058.00 174,064,645.00 Net Premium Written 75,068,663.12 87,475,982.80 105,013,409.00 126,333,481.00 140,003,552.00 Claims Incurred (general business) 25,168,941.81 29,465,751.46 34,170,145.00 42,677,696.00 49,051,411.00 Net commissions 6,329,152.59 6,760,077.91 7,204,448.00 14,332,657.00 10,895,759.00 Expenses of Management 17,111,268.05 20,239,405.79 24,808,273.00 49,249,464.00 36,272,444.00 Underwriting Results 2,416,262.91 3,107,092.70 3,402,770.00 1,604,507.00 (226,282.00) Investment Income (P&L) 5,456,811.86 11,119,938.49 9,429,214.00 11,095,059.00 6,519,735.00 Operating profit/loss after taxation 14,990,949.01 13,104,366.34 20,235,881.00 17,232,015.00 14,134,461.00 Investments 191,790,627.12 240,124,681.03 296,336,802.00 355,009,404.00 390,225,346.00 Assets 245,597,207.41 311,215,873.22 366,252,339.00 430,536,097.00 478,752,455.00 Shareholder’s Funds 44,880,131.46 77,115,760.72 100,958,028.00 114,141,212.00 125,830,028.00
MARKET SHARE GENERAL INSURANCE LONG TERM BUSINESS MARKET SHARE JUBILEE JUBILEE INSURANCE BRITISH AMERICAN INSURANCE ICEA LION LIFE COMPANY APA INSURANCE COMPANY ASSURANCE 11% INSURANCE 2% 1% COMPANY COMPANY 19% LIBERTY LIFE 9% ASSURANCE KENYA UAP 0% INSURANCE COMPANY CIC LIFE 8% OTHERS ASSURANCE BRITAM COMPANY 56% 7% GENERAL OTHERS INSURANCE 71% CIC GENERAL 8% INSURANCE COMPANY 8%
MARKET SHARE (TOTAL ASSETS)
Kenya Re 8%
Others BRITAM 34% 16%
Pan Africa 6%
Liberty Kenya 8% Jubilee CIC Group Holdings 6% 22%
SOURCE:KCB Research & IRA Report
KCB Capital 7 8th Aug 2016
Penetration Rate
Non-Life Premi- Population Life Premium Life Penetra- Non-Life Pene- Total Premium Total Penetration Country um (USD Mil- Millions (USD Millions) tion % tration % (USD Millions) % lions) 1 South Africa 53 39,786 11.4 9,375 2.7 49,159 14.1
2 Namibia 2 648 5 283 2.2 931 7.2 3 Mauritius 1 522 4.1 244 1.9 766 6.0 4 Morocco 33 1,143 1.1 2,257 2.1 3,400 3.2
5 Kenya 46 632 1.06 1,152 1.9 1,784 2.9 6 Tunisia 11 147 0.3 748 1.5 888 1.8 7 Angola 22 31 0 1,110 0.8 1,142 0.8 8 Algeria 40 106 0 1,492 0.7 1,597 0.7 9 Egypt 83 888 0.3 1,079 0.4 1,968 0.7
10 Nigeria 178 457 0.1 1,332 0.2 1,790 0.3 TOTAL 470 44,360 23 19,072 14.4 63,425 37.7
Source: Swiss Re
Challenges
Insurance Fraud: Insurance companies made a combined operating profit of Sh17 billion in 2014, a 15 per cent drop from Sh20 billion a year earlier. This was despite premiums increasing by 17 per cent to stand at Sh157 billion from Sh135 million over the same period. This
drop in profit was largely attributable to losses in the Motor class of insurance business which continued to register high loss ratios. This has
been one of the major causes of failure of insurance companies witnessed in the last 10 years. According to the IRA , 27 out of the 87 fraud
cases that were reported to them in 2014 involved fraudulent accident claims, forged car insurance certificates and fraudulent theft insurance
claims.
Regulatory pressures: The insurance Regulatory Authority has shown indications that it intends to stream line the insurance industry to make it both competitive internationally and financially sound. This will definitely see a lot of realignments in the industry that could force play-
ers to change tact going forward. One example is the capping of a general insurer’s investment in any company at 10 per cent of the underwrit-
er’s total assets. The objective of this is clearly to limit an insurer’s exposure to a single firm and that is reasonable given the underwriters’ obli-
gations to policyholders and other stakeholders.
Cost of Capital: In a tight credit environment, it has become very difficult for companies to finance projects they have lined up. Both the stock market as well as the debt market have become so volatile for companies to use these options for much needed capital. A gloomy
2015 performance in the securities exchange saw many companies post poor uptakes of their debt raising instruments that include rights issues
as well as corporate bonds, for instance, Family Bank managed to raise Sh2 billion through its maiden bond listed on the NSE against a target
of Sh4 billion, which excluded a Sh2 billion green-shoe option.
Competition: As the race for market share intensifies and more companies seek strategic partners to improve their competitive ad- vantage, CIC will need to up its game, if it’s to maintain or grow its market position especially in the short term business where growth in the
premiums is expected to slow down in the market. Despite having a strong SACCO network of distribution and a lucrative partnership with Co-
operative Bank.
KCB Capital 8 8th Aug 2016
Industry Trends
Foreign Appetite: The insurance industry in Kenya has seen a lot of foreign interest in the industry mainly due to the high average market
return of about 20 percent compared to a penetration level of 3 percent, offering potential investors vast opportunities for growth. Cut-throat
competition among underwriters has fuelled quest for funds, making the sector a fertile ground for investors seeking to boost clout or make
fresh entry into the market. In 2016 we are anticipating to see more abrasive acquisitions and investments in the insurance industry, follow-
ing the recent entries of Allianz from Germany, Sham Finances, Old Mutual and Swiss Re. Kenya is both a growth opportunity in a fast-
developing market and an opening to the East African community.
Business diversification: More players are looking to diversify their books from the traditional insurance line of business in efforts
to reduce exposure in this area due to uncertain shocks as well as to increase resources to fund expansion. In 2015 we saw medical insur-
ance suffer a huge blow when the increase in the cost of health lead to huge claims that left players like CIC insurance with huge holes to fill.
This has seen companies enter the “lucrative real estate market to cushion such shocks, a good example is Britam’s interests in Housing
Finance, CIC insurance is also said to eye Kiambu and Kajiado with projects totalling about KSH 1.7B .The industry has seen about 20 per-
cent of its investments going into Property.
Mergers and Acquisitions: The insurance sector in Kenya has seen several mergers, acquisitions and restructuring activities. No-
tably, Real Insurance Company was acquired by British-American Investments Company Limited while Pan Africa insurance has acquired
51% stake into Gateway insurance to grow its general business line. Recently, Morocco-based Sham Insurance bought Mercantile Insur-
ance. With a planned listing of the combined entity on the Nairobi Securities Exchange UAP Old Mutual became an entity in 2015. The com-
bined UAP and Old Mutual businesses in Kenya will be enhanced to include insurance, investment management, properties, banking and
securities brokerage thus creating a strong operating platform to continue growing the business Mauritius Union Insurance also received
approval to acquire Kenyan-based Phoenix of East Africa Assurance. Some of the mergers and acquisitions were as a result of the legal
requirement that no one individual should own more than 25% of the share capital of an insurance company. In some cases, mergers and
acquisitions resulted from foreign insurance multinationals establishing a foothold in Kenya with the aim of expanding to the rest of the East
and Central African regions.
Risk Based Capital Requirement: From the ongoing implementation risk based supervision by the regulators, the draft Insurance
bill in Kenya to the IFRS 4 Phase II Standard, insurance executives find themselves looking forward to an increasingly complex regulatory
environment. Notably, is the risk based capital requirements where an insurer’s capital requirements will be pegged to the riskiness of their
balance sheet assets and liabilities. For instance, overexposure in the equity as an asset class will require an insurer to hold more capital.
This will force Insurers to start thinking about their efficient management and allocation of capital.
KCB Capital 9 8th Aug 2016
Growth Prospects
Expansion: Kenya's Insurance Regulatory Authority has formed an agreement with Namibia's Financial Institutions Supervisory Authority to
share information in order to facilitate the entry or expansion of Kenyan insurance firms into the Namibian market. Companies like Britam have
expanded to include Kenya Uganda Tanzania, Rwanda, Malawi, South Sudan and now Mozambique. In 2015, Jubilee Insurance entered the
Democratic Republic of Congo where it plans to tap high demand for cover in the country. The insurer partnered with State-owned insurance
company Sonas to offer medical and life cover products. The combined UAP and Old Mutual businesses in Kenya will be enhanced to include
insurance, investment management, properties, banking and securities brokerage thus creating a strong operating platform to continue grow-
ing the business
Technology and Innovation: The industry has seen a lot of progress in both product and technological innovations. We have seen prod-
ucts like “Linda Jamii” that focused on the low middle class and low income earners in efforts to secure market share and improve penetration.
This was a partnership between Safaricom and Britam where clients could pay premiums as low as KSh 1,200 through the M-Pesa platform.
Britam has also undertaken a massive technology project worth Ksh3B called “JAWABU”. It is expected that he increased adoption of
smartphones and IT is expected to boost business across various sectors in the region. Besides increasing efficiency by up to 30 per cent
across all operations, the project, once fully implemented, is also set to eliminate manual processes and introduce standardized, more efficient
systems, leading to faster processing of claims.
Penetration/Returns: The insurance industry in Kenya has seen a lot of M&A activities mainly due to the high average market return of
about 20 percent compared to a penetration level of 3 percent, offering potential investors vast opportunities for growth. The level of insurance
penetration, measured as a percentage of premiums to GDP for Africa sits at 3.5%. This is relatively higher than the emerging markets’ aver-
age of 2.72%, but much lower than the average for advanced markets of 8.27%, and the global average of 6.28%. Private equity firm LeapFrog
Investments are in the market for companies that are weighted towards life insurance but could also look into general life business in future.
The population base in Kenya is large but the life insurance penetration levels remain low. That coupled with the enabling digital space and
good labor skills make Kenya an attractive market
Business partnerships: Partnerships between insurers and the banks in offering insurance covers through the bancassurance model
have been on the rise. Although insurers say the potential market is in excess of Sh200 billion, banks are better placed to professionalise in-
surance sales while improving national savings and product development based on established customer needs. Barclays Kenya, CFC Stanbic
Bank, Chase Bank, Commercial Bank of Africa, Co-operative Bank of Kenya, Diamond Trust Bank, Equity Bank Kenya, KCB, NIC Bank and
Standard Chartered, have all jumped into the billion shilling market.
KCB Capital 10 8th Aug 2016
DISCLAIMER
KCB Capital Ltd investment rankings: BUY = Expected to outperform the local market by >10%; HOLD = Expected not outperform the local market by 0-10%;
SELL = Expected to underperform the local market by >10%. Performance is defined as 12- month total return (including dividends). This report has been pre-
pared by KCB Capital Limited, a subsidiary of KCB Group. KCB Bank, its subsidiaries, branches and affiliates are referred to herein as KCB Group. This report is
for distribution only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment
strategy or recommendation contained herein is suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommen-
dation. It is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or
sell any securities or related financial instruments in any jurisdiction. No representation or warranty, express or implied, is provided in relation to the accuracy,
completeness or reliability of the information contained herein, except with respect to information concerning KCB Group, its subsidiaries and affiliates, nor is it
intended to be a complete statement or summary of the securities, markets or developments referred to in the report. KCB Group does not undertake that inves-
tors will obtain profits, nor will it share with investors any investment profits nor accept any liability for any investment losses. Investments involve risks and
investors should exercise prudence in making their investment decisions. The report should not be regarded by recipients as a substitute for the exercise of
their own judgment. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other
business areas or groups of KCB Group as a result of using different assumptions and criteria. Research will initiate, update and cease coverage solely at the
discretion of KCB Group Research Management. The analysis contained herein is based on numerous assumptions. Different assumptions could result in mate-
rially different results. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constitu-
encies for the purpose of gathering, synthesizing and interpreting market information. KCB Group is under no obligation to update or keep current the infor-
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other areas, units, groups or affiliates of KCB. The compensation of the analyst who prepared this report is determined exclusively by research management and
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relate to the revenues of KCB Group as a whole, of which investment banking, sales and trading are a part. The securities described herein may not be eligible
for sale in all jurisdictions or to certain categories of investors. Past performance is not necessarily indicative of future results. Foreign currency rates of ex-
change may adversely affect the value, price or income of any security or related instrument mentioned in this report. For investment advice, trade execution or
other enquiries, clients should contact their local sales representative. Neither KCB Group nor any of its affiliates, nor any of KCB' or any of its affiliates, direc-
tors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report.
KCB Capital, Analyst :Joshua .J. Otiende 17,Moi Avenue Kencom Hse ,2nd Flr Tel:+254 709812732 P.O. Box 48400-00100 Nairobi Email: [email protected] Kenya
KCB Capital 11