Weekly report - Week 35 Market Perfomance P revious T oday %Change

Market Summary Shares traded 125,158,500 358,870,700 186.7% It was a mixed bag for the NSE Last week. After a very tumultuous week in the banking industry that Equity Turnover (KES) 2,670,283,939 6,726,668,014 151.9% saw banking stocks lose over 40bn on the market, Banks bounced back mainly due to investors who Market Cap (KES Bill) 1,944 1,931 -0.7% were keen to take advantage of the low entry levels for banks stocks. Most activity was seen on Market Cap (USD Mil) 19 19 -0.6% Safaricom where investors were rushing to lock in the ordinary and special dividend before book NSE-20 Share Index 3,217 3,188 -0.9% closure. Other counters that registered elevated activity were KCB Group, Equity bank and Co- NSE All Share Index 135 134 -0.7% 3,552 3,485 operative bank that witnessed activity mostly from investors that were taking advantage of the low NSE 25 Share Index -1.9% 91-day Treasury Bills 8.607 8.258 -4.1% banking valuations as well as investors fleeing to value. 182-day Treasury Bills 11.182 11.125 -0.5%

All the main indices closed the week in the red.The Alsi, NSE 20 and NSE 25 shed 0.67%, 0.89% and 364-day Treasury Bills 11.982 11.502 -4.0% 1.87% respectively to close at 134.6, 3,187.87 and 3,485.42. Top Gainers & Losers Top gainers W eek Close w-o-w % Shares Traded Gainers Following news that Kuramo Capital had agreed to acquire about 25% percent of Transcentury’s Trans-Century Ltd 6.6 45.6% 52,500 Housing Finance Group Ltd 16.7 19.4% 312,300 shareholding in exchange for 2.0bn cash injection (a big premium on the price of Kes 4.50), NIC Bank Ltd 27.8 15.6% 486,900 Transcentury’s share prices soared 45.5% to close the week at Kes 6.60 from Kes 4.50 the previous Eveready East Ltd 2.2 13.2% 14,200 Barclays Bank of Ltd 9.7 12.9% 5,925,700 Friday. NIC Bank Ltd and Barclays Bank Kenya Ltd gained 15.6% and 12.9% respectively. This was Losers largely considered as price correction following a rout on bank share prices that was triggered by the Standard Group Ltd 22.3 -17.6% 3,000 Kenya Plc 31.5 -14.3% 56,700 interest rate cap law. Crown Paints Kenya Ltd 40.3 -11.5% 133,800 E.A.Cables Ltd 7.0 -11.5% 221,100 Top Losers Uchumi Supermarket Ltd 3.2 -11.1% 117,100 Actively Traded Following disappointing results from the media industry, Standard Group share price shed 17.6% to Safaricom Ltd 20.0 1.5% 135,559,500 KCB Group Ltd 26.5 -1.9% 86,416,000 close the week at Kes 22.3 form Kes 27.00 the previous week. Sanlam Kenya Plc lost 14% following Ltd 26.5 -10.2% 77,945,000 the rebranding from Pan African . The other top losers were Crown Paints Kenya, E.a The Co-operative Bank of Kenya Ltd 11.5 6.0% 22,681,000 Cables and Uchumi Supermarket shedding 11.5%, 11.5% and 11.1% respectively. Barclays Bank of Kenya Ltd 9.65 12.9% 5,925,700 Forex Currency P revious T oday %Change

The Kenya shilling has remained stable against regional and global peers except the South African US D/KE S 101.38 101.30 0.083% Rand (losing 8.644%) and marginally losing against the Sterling pound (0.2316%). The South African STG Pound/KES 133.98 134.27 -0.216% Rand has gained against major currencies following an easing of the political concerns. On the E uro 114.52 112.78 1.545% regional front, the Kenya shilling lost 0.15% and 0.046% against Ugandan shilling and Tanzanian JP Y (100) 101.08 97.41 3.771% shilling respectively KE S /US H 33.27 33.32 -0.150%

KE S /T S H 21.57 21.58 -0.046%

1 S A RAND 7.52 6.87 -8.644% Thematic Stories Implementation of the Interest rate cap law Following the gazettment of the Banking (Amendment) Act 2016, commercial banks and mortgage finance companies have been given up to September 14, 2016 to cut the cost of loans and fully implement the new law that provides for capping of interest rate while at the same time introducing a floor on interest on customer deposits. In a circular sent to banks by the , a financial institution that charges borrowers more than the stipulated interest rates, or gives less deposit rate than the stated rate will be fined Sh1 million or the bank chief executive will be imprisoned for one year or both. Signing of the EPA Trade pact Attention has shifted to President John Magufuli as Kenya leads its integration partners to Arusha in a last-ditch effort to safeguard its free trade arrangement with Europe, amid stiff opposition from . The ’s extra-ordinary heads of state summit follows a surprise move by Tanzania to pull out of an earlier commitment that would see the bloc collectively sign Economic Partnership Agreements (EPAs) with Europe before the September 30 deadline. While had previously raised concerns over the EPA trade pact, it has since agreed to sign the agreement leaving Tanzania as the only opposition. (Business Daily) New auditing standard for NSE-listed firms Listed companies and intermediaries of the Securities Exchange (NSE) will be subjected to more stringent auditing standards from January 2017.The auditors will be required to disclose all key matters that affect a particular business or operation in the course of the year for the purpose of providing full information for shareholders and other stakeholders. According to the Institute of Certified Public Accountants of Kenya (ICPAK), the revelation of the key audit matters (KAM) will be introduced locally in a bid to make information in company books more accessible to the non-technical people. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. (Business Daily) Centum plans to build a 28MW solar farm Investment firm Centum plans to put up a 23-megawatt solar power plant to supply electricity to a mixed-use real estate project to be constructed in Vipingo, Kilifi County. The Nairobi-bourse listed firm said works on the solar farm, whose cost is still unknown, will start once it gets a power generation and distribution licence from the Energy Regulatory Commission. Centum is building the development on a 10,254 acre land the firm purchased last year from Rea Vipingo Holdings — a sisal plantation firm that sold part of its land as it de-listed from the Nairobi Securities Exchange (NSE). The investment firm will be seeking shareholders’ approval to form a special purpose vehicle dubbed Rea Power Co. to generate and distribute power within the proposed development at Vipingo. (Business Daily)

2 Average T otal Forward Return SECURITY Prices as at S hares Mkt Cap. EPS Earnings Forward P /E Dividend E arnings on 31/08/2016 Issued Kshs Mn. Total Earnings EPS (annualized) Growth DPS P /E P /E Share Value Y ield Y ield E quity S T AT US AGRICULTURAL FY 2015 Eaagads Ltd Ord 1.25 AIMS 20.00 32,157,000 643.14 477,000 0.01 0.03 110% 0.00 1348.30 643.14 41.93 0.00% 0.07% 0.07% FY 2015 Kakuzi Ltd Ord.5.00 270.00 19,599,999 5,292.00 527,687,000 26.92 31.63 17% 5.00 10.03 8.54 317.23 1.85% 9.97% 15.32% FY 2015 Kapchorua Tea Co. Ltd Ord Ord 5.00 AIMS 85.00 7,824,000 665.04 234,322,000 29.95 37.70 26% 5.00 2.84 2.25 107.01 5.88% 35.23% 16.41% FY 2015 The Limuru Tea Co. Ltd Ord 20.00 AIMS 790.00 2,400,000 1,896.00 3,044,000 1.27 1.46 15% 1.00 622.86 541.71 908.34 1.27% 0.16% 1.20% FY 2015 Sasini Ltd Ord 1.00 18.95 228,055,500 4,321.65 1,101,212,000 4.83 6.58 36% 1.25 3.92 2.88 25.81 1.75% 25.48% 8.15% FY 2015 W illiamson Tea Kenya Ltd Ord 5.00 AIMS 175.00 17,512,640 3,064.71 738,209,000 42.15 45.68 8% 40.00 4.15 3.83 189.65 22.86% 24.09% 10.59% 307,549,139 15,883 2,604,951,000 S ector P E 6.10 AUTOMOBILES & ACCESSORIES FY 2015 Car & General (K) Ltd Ord 5.00 31.50 40,103,308 1,263.25 127,147,000 3.17 3.74 18% 0.00 9.94 8.42 37.16 0.00% 10.07% 4.21% FY 2015 Marshalls (E.A.) Ltd Ord 5.00 8.50 14,393,106 122.34 (694,000) 0.0 0.01 114% 0.00 -176.28 1,223.41 1.22 0.00% -0.57% -0.25% FY 2015 Sameer Africa Ltd Ord 5.00 2.80 278,342,393 779.36 (16,552,700) -0.06 0.00 -106% 0.00 -47.08 779.36 0.17 0.00% -2.12% -0.65% 332,838,807 2,165 109,900,300 S ector P E 19.70 BANKING HY 2016 Barclays Bank of Kenya Ltd Ord 0.50 9.65 5,431,536,000 52,414.32 8,173,378,000 1.50 1.42 -6% 1.00 6.41 6.81 9.09 10.36% 15.59% 21% HY 2016 CFC Stanbic of Kenya Holdings Ltd ord.5.00 78.00 395,321,638 30,835.09 4,786,928,000 12.11 11.13 -8% 6.15 6.44 7.01 71.70 7.88% 15.52% 13% HY 2016 Diamond Trust Bank Kenya Ltd Ord 4.00 141.00 266,321,115 37,551.28 6,754,916,000 25.36 23.28 -8% 2.50 5.56 6.06 129.42 1.77% 17.99% 17%

HY 2016 Equity Group Holdings Ltd Ord 0.50 26.50 3,773,674,802 18,509.00 20,159,870,000 5.34 4.77 -11% 2.00 4.96 5.56 23.66 7.55% 20.16% 27% HY 2016 Housing Finance Group Ltd Ord 5.00 16.65 352,416,667 5,867.74 1,225,106,000 3.48 3.35 -4% 1.30 4.79 4.97 16.04 7.81% 20.88% 11% HY 2016 I&M Holdings Ltd Ord 1.00 82.50 392,362,039 32,369.87 6,966,528,000 17.76 16.57 -7% 2.90 4.65 4.98 76.98 3.52% 21.52% 24% HY 2016 KCB Group Ltd Ord 1.00 26.50 3,066,056,647 81,250.50 21,000,506,000 6.85 6.52 -5% 2.00 3.87 4.06 25.24 7.55% 25.85% 23% HY 2016 Ltd Ord 5.00 7.00 308,000,000 36,796.87 622,588,000 2.02 1.82 -10% 0.00 3.46 3.85 6.30 0.00% 28.88% 5% HY 2016 NIC Bank Ltd Ord 5.00 27.75 639,945,603 17,758.49 4,610,204,000 7.20 6.56 -9% 1.25 3.85 4.23 25.28 4.50% 25.96% 16% HY 2016 Standard Chartered Bank Kenya Ltd Ord 5.00 191.00 343,510,571 65,610.52 10,452,628,000 30.43 26.20 -14% 17.00 6.28 7.29 164.46 8.90% 15.93% 24% HY 2016 The Co-operative Bank of Kenya Ltd Ord 1.00 11.45 4,889,316,295 55,982.67 14,820,168,000 3.03 2.93 -3% 0.80 3.78 3.90 11.09 6.99% 26.47% 26% 19,858,461,377 434,946 99,572,820,000 S ector P E 4.37 COMMERCIAL AND SERVICES HY 2016 Express Kenya Ltd Ord 5.00 AIMS 3.15 35,403,790 111.52 (31,106,000) (0.9) (1.0) 13% 0.00 -3.59 -3.19 3.54 0.00% -27.89% -34.9% FY 2015 Kenya Airways Ltd Ord 5.00 3.55 1,496,469,035 5,312.47 (26,225,000,000) (17.5) (14.70) -16% 0.00 -0.20 -0.24 2.98 0.00% -493.65% -73.4% FY 2015 Longhorn Publishers Ltd Ord 1.00 AIMS 5.30 369,940,476 1,960.68 71,726,000 0.2 0.22 12% 0.35 27.34 24.51 5.91 6.60% 3.66% 20.4% FY 2015 Nairobi Business Ventures Ltd Ord. 1.00GEMS 7.50 23,600,000 177.00 4,423,000 0.2 0.21 13% 0.00 40.02 35.40 8.48 0.00% 2.50% 8.9% HY 2016 Ltd Ord. 2.50 116.00 188,542,286 21,870.91 3,178,000,000 16.9 15.38 -9% 10.00 6.88 7.54 105.85 8.62% 14.53% 32.6% FY 2015 Standard Group Ltd Ord 5.00 22.25 81,731,808 1,818.53 289,603,000 3.5 2.94 -17% 0.00 6.28 7.58 18.44 2.99% 15.93% 19.2% HY 2016 TPS Eastern Africa Ltd Ord 1.00 17.00 182,174,108 3,096.96 (57,627,000) (0.3) 0.26 -183% 1.35 -53.74 64.52 -14.16 2.99% -1.86% -0.6% FY 2015 Uchumi Supermarket Ltd Ord 5.00 3.20 364,959,616 1,167.87 (3,421,360,000) (9.4) (8.22) 12% 0.00 -0.34 -0.39 2.81 2.99% -292.96% -462.7% HY 2016 W PP Scangroup Ltd Ord 1.00 17.00 378,865,102 6,440.71 249,698,000 0.7 0.77 16% 0.00 25.79 22.21 19.74 2.99% 3.88% 2.9% 4,742,975,334 45,069 (25,941,643,000) S ector P E -1.74 CONSTRUCTION & ALLIED FY 2015 Athi River Mining Ord 1.00 28.00 495,275,000 13,867.70 (2,890,841,000) (5.84) (0.39) -93% 0.00 -4.80 -71.12 1.89 0.00% -20.85% -0.17% HY 2016 Bamburi Cement Ltd Ord 5.00 160.00 362,959,275 58,073.48 5,798,000,000 15.97 13.78 -14% 13.00 10.02 11.61 137.98 8.13% 9.98% 19.55% FY 2015 Crown Paints Kenya Ltd Ord 5.00 40.25 71,181,000 2,865.04 30,748,000 0.43 0.44 1% 0.60 93.18 92.42 40.58 1.49% 1.07% 2.27% HY 2016 E.A.Cables Ltd Ord 0.50 6.95 253,125,000 1,759.22 (62,930,000) (0.25) (0.22) 11% 0.00 -27.96 -31.41 6.18 0.00% -3.58% -0.79% FY 2015 E.A.Portland Cement Co. Ltd Ord 5.00 27.50 90,000,000 2,475.00 (821,486,000) (9.13) (0.31) -97% 0.00 -3.01 -88.39 0.94 0.00% -33.19% -5.23% 1,272,540,275 79,040 2,053,491,000 S ector P E 38.49 ENERGY & PETROLEUM FY 2015 KenGen Co. Ltd Ord. 2.50 6.00 6,243,873,779 37,463.24 2,822,000,000 0.45 0.5 6% 0.65 13.28 12.49 6.38 10.83% 7.53% 1.99% HY 2016 KenolKobil Ltd Ord 0.05 11.45 1,471,761,200 16,851.67 2,379,874,000 1.62 1.7 5% 0.35 7.08 6.74 12.03 3.06% 14.12% 25.72% FY 2015 Kenya Power & Lighting Co Ltd Ord 2.50 8.00 1,951,467,045 15,611.74 7,431,957,000 3.81 4.0 5% 0.30 2.10 2.00 8.40 3.75% 47.60% 12.09% HY 2016 Total Kenya Ltd Ord 5.00 5.30 175,028,706 927.65 1,435,800,000 8.20 9.1 11% 0.80 0.65 0.58 5.91 15.09% 154.78% 8.05% FY 2015 Umeme Ltd Ord 0.50 5.50 1,623,878,005 8,931.33 3,207,787,879 1.98 2.2 9% 1.40 2.78 2.55 6.00 25.45% 35.92% 21.20% 11,466,008,735 79,786 17,277,418,879 S ector P E 4.62 INSURANCE

HY 2016 Ltd Ord 0.10 10.40 1,938,415,838 20,159.52 3,557,790,000 1.84 2.06 12% 0.30 5.67 5.04 11.69 2.88% 17.65% 21% HY 2016 CIC Insurance Group Ltd Ord.1.00 4.05 2,615,538,528 10,592.93 734,776,000 0.28 0.31 9% 0.10 14.42 13.24 4.41 2.47% 6.94% 4% HY 2016 Jubilee Holdings Ltd Ord 5.00 470.00 65,884,500 30,965.72 3,157,470,000 47.92 60.71 27% 8.50 9.81 7.74 595.41 1.81% 10.20% 15% HY 2016 Kenya Re Insurance Corporation Ltd Ord 2.50 19.90 699,949,068 13,928.99 3,128,176,000 4.47 5.71 28% 0.75 4.45 3.48 25.45 3.77% 22.46% 13% FY 2015 Liberty Kenya Holdings Ltd Ord.1.00 16.90 535,707,499 9,053.46 1,150,000,000 2.15 1.87 -13% 0.00 7.87 9.05 14.70 0.00% 12.70% 19% HY 2016 Sanlam Kenya Plc Ord 5.00 31.50 144,000,000 4,536.00 (256,738,000) -1.78 0.35 -119% 0.00 -17.67 90.72 -6.13 0.00% -5.66% -7% 5,999,495,433 89,237 11,471,474,000 S ector P E 7.78 INVESTMENT

FY 2015 Centum Investment Co Ltd Ord 0.50 36.25 665,441,775 24,122.26 9,947,630,000 14.95 17.1 15% 1.00 2.42 2.12 41.54 2.76% 41.24% 23.00% FY 2015 Home Afrika Ltd Ord 1.00 1.20 405,255,320 486.31 (390,091,000) -0.96 0.8 18% 0.00 -1.25 1.52 -0.98 0.00% -80.22% -495.55% FY 2015 Kurwitu Ventures Ltd Ord 100.00 1500.00 102,272 153.41 (15,433,044) -150.90 -117.3 22% 0.00 -9.94 -12.78 1166.33 0.00% -10.06% -16.90% FY 2015 Olympia Capital Holdings Ltd Ord 5.00 3.00 40,000,000 120.00 14,834,000 0.37 0.4 4% 0.00 8.09 7.74 3.13 0.00% 12.36% 1.29% Trans-Century Ltd Ord 0.50 AIMS 6.55 281,426,593 1,843.34 (2,422,574,000) -8.61 -7.5 13% 0.00 -0.76 -0.88 5.68 0.00% -131.42% -68.32% 1,392,225,960 26,725 7,134,365,956 S ector P E 3.75 INVESTMENT SERVICES

FY 2016 Nairobi Securities Exchange Ltd Ord 4.00 17.00 259,500,000 4,411.50 305,592,000 1.18 0.75 -36% 0.49 14.44 22.62 10.85 2.88% 6.93% 17% 259,500,000 4,412 305,592,000 S ector P E 14.44 MANUFACTURING & ALLIED

HY 2016 B.O.C Kenya Ltd Ord 5.00 84.00 19,525,446 1,640.14 136,232,000 6.98 7.17 3% 5.20 12.04 11.72 86.32 6.19% 8.31% 8% FY 2015 British American Tobacco Kenya Ltd Ord 10.00 830.00 100,000,000 83,000.00 4,980,000,000 49.80 51.00 2% 49.50 16.67 16.27 850.00 5.96% 6.00% 168% FY 2015 Carbacid Investments Ltd Ord 1.00 14.45 254,851,988 3,682.61 393,863,000 1.55 1.61 4% 0.70 9.35 8.98 15.04 4.84% 10.70% 16% FY 2016 East African Breweries Ltd Ord 2.00 244.00 790,774,356 192,948.94 10,270,000,000 12.99 15.17 17% 7.50 18.79 16.08 285.10 3.07% 5.32% 67.6% FY 2015 Eveready East Africa Ltd Ord.1.00 2.15 210,000,000 451.50 (77,710,000) -0.37 (0.33) 10% 0.00 -5.81 -6.45 1.94 0.00% -17.21% -25.7% HY 2016 FTG Holdings Ltd Ord 0.825 4.15 161,866,804 671.75 161,056,000 0.99 1.05 6% 0.00 4.17 3.95 4.38 0.00% 23.98% 20% HY 2016 Kenya Orchards Ltd Ord 5.00 AIMS 95.00 12,868,124 1,222.47 2,712,696 0.21 0.23 11% 0.00 450.65 407.49 105.06 0.00% 0.22% 37% FY 2015 Mumias Sugar Co. Ltd Ord 2.00 1.05 1,530,000,000 1,606.50 (4,773,600,000) -3.12 (2.61) 16% 0.00 -0.34 -0.40 0.88 0.00% -297.14% -71% HY 2016 Unga Group Ltd Ord 5.00 31.00 75,708,873 2,346.98 654,378,000 8.64 9.25 7% 1.00 3.59 3.35 33.16 3.23% 27.88% 19% 3,155,595,591 287,571 11,746,931,696 S ector P E 24.48 TELECOMMUNICATION & TECHNOLOGY Safaricom Ltd Ord 0.05 19.95 40,065,428,000 799,305 38,100,000,000 0.53 0.99 86% 0.76 37.64 20.24 37.11 3.81% 2.66% 32.64% 40,065,428,000 799,305 38,100,000,000 S ector P E 20.98

NB: Sector P/E do not include negative earnings M arket P E 11.33 Data source: NSE/company filings/kcbc DIS CLAIMER: Views expressed in this document are solely those of our Research Department and are subject to change without notice. This report is prepared for general information only and as such, the specific needs, investment objectives or financial situations of any particular user have not been taken into consideration. Utmost care has been taken in the preparation of this report. However, KCBCapital Ltd does not warrant accuracy, adequacy or completeness of this information and expressly3 disclaims liability for errors or omissions in this information. All facts and figures used here are from sources deemed reliable and believed to be accurate. They have been prepared from data available as at the date of preparation and may have since changed. Past performance does not guarantee future results. Disclaimer This report has been prepared 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 recommendation. 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 investors 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 materially different results. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information. KCB Group is under no obligation to update or keep current the information contained herein. KCB Group relies on information barriers to control the flow of information contained in one or more areas within KCB Group, into other areas, units, groups or affiliates of KCB. The compensation of the analyst who prepared this report is determined exclusively by research management and senior management (not including ). Analyst compensation is not based on investment banking revenues, however, compensation may 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 exchange 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, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report.

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