Weekly Equity Update 14th SEP 2017

Market Overview Market Perfomance Previous Today %Change The market was consistently upbeat in the week with Equity turnover almost doubling to KES 4.05Bn from Shares traded 74,601,200 172,465,600 131.18% Equity Turnover (KES Bill) 2.09 4.05 93.76% KES 2.7Bn posted in the previous week. Total shares traded increased by >100% to 172.369Mn shares Market Cap (KES Bill) 2,418 2,421 0.12% changing hands. Although the market indices were on an upward trajectory this week, most of the gain Market Cap (USD Mil) 23.3 23.4 0.65% were lost by Friday’s trading Markets indices, although on an upward trajectory this week, shed most of NSE-20 Share Index 3,977 3,993 0.40% their gains in Friday’s trading. The NSE-20 share index closed at 3992.76points down from the 22-month NSE All Share Index 165.0 165.2 0.12% NSE 25 Share Index 4,401 4,414 0.29% high posted on Tuesday settling 0.40% higher from last week. NASI closed 0.29% higher to 165.20points. 91-day Treasury Bills 8.199 8.153 -0.56% Activity on the market was concentrated on the large-cap with Equity recording a turnover of KES 182-day Treasury Bills 10.320 10.316 -0.04% 983.93Mn this week while its volumes registered at 22.9Mn shares. Safaricom moved 38.6Mn shares 364-day Treasury Bills 10.905 10.906 0.01% Top Gainers & Losers with the share price losing 1.02% to KES 24.25. Week Close w-o-w % Shares Traded Banking sector stocks continued to post gains closing higher this week save for Barclays (-1.4%) and NIC(- Gainers 0.7%). Co-operative saw its share price gaining a thin margin of 0.3% (Y-t-d 24.62%) to KES 16.20 Olympia Capital Holdings Ltd 3.35 21.8% 40,800 Securities Exchange Plc 23.75 13.1% 402,700 after its releasing its HY17 earnings yesterday. I&M Holdings was the top gainer in the sector at 7.8% to CIC Insurance Group Ltd 6.25 11.6% 7,159,600 settle at KES 124.00. Kapchorua Tea Co. Ltd 91.50 8.9% 3,500 The Co-operative Bank posted an 11.3% y/y decline in PAT to KES 9.2Bn following a decline in interest B.O.C Ltd 108.00 8.0% 6,000 Losers income by 10.3% (KES 19.3Bn) .Despite the decline, cost of funds was managed following cheaper deposits Express Kenya Ltd 3.6 -10.0% 2,400 at 3.9% compared to 5.0% recorded in Q2-16. Non-interest income stood at KES 7.1Bn from KES 6.4Bn Eaagads Ltd 25.3 -9.8% 500 supported by an increase alternative banking channels transactions which rose to 53.6Mn from 51.4Mn. Uchumi Supermarket Plc 4.0 -6.0% 2,897,400 Deacons (East Africa) Plc 4.4 -5.4% 368,500 Cost to income ratio (excluding provisions) rose marginally to 47.9% from KenolKobil Ltd 15.5 -4.3% 19,287,600 45.3% on lower operating income at -3.7% and increase of 8.7% in staff costs. On the balance sheet, Loan Actively Traded book growth stood at 14.2% to KES 252.6Bn supported by increase in personal lending (31.5% of loan Safaricom Ltd 24.3 -1.0% 38,564,700 Plc 43.0 0.6% 21,882,100 book), Mortgage and Asset . In line with this, loan loss provisions increased by 15.2% with the NPL KenolKobil Ltd 15.5 -4.3% 19,287,600 ratio rising marginally to 4.5% to 4.1%. Deposits grew by 2.7% while borrowed funds expanded by 64.6% KenGen Co. Ltd 9.3 0.0% 11,719,600 The Co-operative Bank of Kenya Ltd 16.2 0.3% 10,645,100 after the bank drew its final loan tranche from IFC which largely supported the loan book growth.

1 PICK

Price as at YTD 52-week 52-week Target Stock 8/18/2017 Return low high P/B P/E EPS BVPS Price Upside Analyst's Call KPLC 10.6 33% 6.00 12.00 0.32 2.05 3.87 33.62 20.17 90% Strong BUY Kengen 9.2 60% 4.95 10.00 0.33 7.96 1.08 27.67 16.60 80% Strong BUY NIC 36.3 44% 20.00 37.00 0.75 5.60 6.47 48.48 53.77 48% Strong BUY KCB 44.0 -50% 22.50 47.50 1.33 6.81 6.46 33.01 54.93 25% BUY Stanbic 82.5 184% 58.00 88.00 1.11 7.38 11.18 74.04 102.65 24% BUY I&M Bank 124.0 854% 74.00 126.00 1.69 6.68 18.56 73.55 152.96 23% BUY Umeme 14.0 -38% 12.20 18.20 1.34 1.45 9.67 10.45 16.80 20% BUY Kenya -Re 22.0 -21% 17.50 24.50 0.64 4.56 4.83 34.44 26.40 20% BUY Sanlam 30.0 123% 18.00 40.00 1.10 61.09 0.49 27.34 36.00 20% BUY Liberty 14.0 11% 5.55 17.00 1.11 11.95 1.17 12.61 16.80 20% BUY Britam 15.4 3% 9.00 15.90 1.67 12.01 1.28 9.18 18.42 20% BUY E.A Cables 6.6 -91% 200.00 288.00 0.65 (1.83) (3.61) 10.10 7.88 19% BUY Total 23.5 -80% 16.00 25.00 0.76 5.77 3.55 30.74 27.66 18% BUY DTB 190.0 3093% 102.00 196.00 1.22 8.23 23.10 155.62 215.78 14% HOLD ARM 20.8 22% 18.75 32.50 0.72 (3.26) (6.36) 28.96 22.58 9% HOLD Stanchart 234.0 24% 165.00 243.00 1.56 9.05 25.85 150.26 250.02 7% HOLD BBK 10.8 -57% 7.00 12.00 1.33 8.21 1.31 8.11 11.24 5% SELL COOP 17.5 34% 9.75 18.00 1.35 7.86 2.22 12.90 17.89 3% SELL Equity Bank 43.3 397% 23.50 45.00 2.05 9.87 4.38 21.05 43.78 1% SELL Centum 44.0 47% 30.50 46.00 0.62 3.77 10.93 71.03 42.62 -3% SELL Kenol Kobil 16.4 -57% 10.70 16.75 2.44 9.99 1.64 6.71 14.50 -12% SELL

2 Corporate Actions

Barclays Bank of Kenya Ltd announced an Interim dividend of Kes.0.20 on 15-Aug-2017; Books Closure 08- Sep-2017; Payment 13-Oct-2017. Stanbic Holdings Plc announced an Interim dividend of Kes.1.25 on 14-Aug-2017; Books Closure 11-Sep- 2017; Payment 29-Sep-2017. KCB Group Plc announced an Interim dividend of Kes.1.00 on 03-Aug-2017; Books Closure 04-Sep-2017; Payment 31-Oct-2017. KenolKobil Ltd announced an Interim dividend of Kes.0.30 on 03-Aug-2017; Books Closure 25-Aug-2017; Payment 01-Oct-2017. East African Breweries Ltd announced a Final dividend of Kes.5.50 on 28-Jul-2017; Books Closure 25-Aug- 2017; Payment 31-Oct-2017. Ltd announced an Interim dividend of Kes.2.50 on 26-Jul-2017; Books Closure 15- SECTOR TURNOVER REAL ESTATE Sep-2017; Payment 29-Sep-2017. AUTOMOBILES INVESTMENT & ACCESSORIES TRUST BAT Kenya Ltd announced an Interim dividend of Kes.3.50 on 20-Jul-2017; Books Closure 21-Aug-2017; AGRICULTURE 0% 0% 0% Payment 21-Sep-2017. BANKING Williamson Tea Kenya Ltd announced Final dividend of Kes.10.00 on 04-Jul-2017; Books Closure 22-Aug- TELECOMMUNIC 35% ATION & TECHNOLOGY 2017; Payment (Subject to Approval) 45%

Kapchorua Tea Company Ltd announced Final dividend of Kes.3.00 on 04-Jul-2017; Books Closure 22-Aug- COMMERCIAL AND SERVICES 2017; Payment (Subject to Approval) 7% Centum Investment Co. Plc announced a Final dividend of Kes.1.20 on 13-Jun-2017; (Subject to Approval) CONSTRUCTION & ALLIED MANUFACTURIN INSURANCE Safaricom Ltd announced a Final dividend of Kes.0.97 on 10-May-2017; Books Closure 01-Sep-2017; G & ALLIED 0% INVESTMENT 2% ENERGY & 7% SERVICES INVESTMENT PETROLEUM Payment 01-Dec-2017. 0% 1% 3% Flame Tree Group Holdings Ltd announced a Bonus Issue of 1:10 on 28-Apr-2017; Books Closure 29-Jun- 2017; Credited 21-Aug-2017.

3 Research Analyst

Joshua Otiende- +254 (020) 327 0000 Ext 11732

Disclaimer

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