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 stocks 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 Bank 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 Nairobi 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 Kenya 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 Equity Group Holdings Plc 43.0 0.6% 21,882,100 book), Mortgage and Asset finance. 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 STOCK 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. Nation Media Group 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 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.