Kenya Commercial Bank Ltd., the country’s biggest lender by assets, headed for its largest gain in more than three months after being rated buy in new coverage by Genghis Capital Ltd.
The stock climbed 5.5 percent to 38.25 shillings by 2:30 p.m. in Nairobi, the biggest intraday increase since March 12. Almost 3.3 million shares traded, 1.4 times the three-month daily average.
Kenya Commercial’s price estimate was set at 44.68 shillings, the Nairobi-based brokerage said yesterday in an e-mailed research note after trading closed.
“After posting single-digit growth on loans and advances for the first quarter of 2013 we project a return to 20 percent growth by year-end,” Genghis Capital analysts Muammar Ismaily and Evelyne Wanjiku said in the note. “We also expect a surge in transactional volumes based on the uptake of the Internet, mobile and agency platforms, which should see net fees and commissions grow by 19 percent in financial year 2013.”
Loans in the three months through March grew to 211.9 billion shillings ($2.47 billion) compared with 195.3 billion shillings a year earlier. Net interest income, the money banks earn from interest charges, increased 5.7 percent to 7.37 billion during the period, the lender said May 8.
Kenya Commercial’s stock advanced 22 percent this year through yesterday’s close, compared with a gain of 25 percent for the Nairobi Securities Exchange All Share Index (NSEASI), according to data compiled by Bloomberg. The lender’s 14-day relative strength index climbed to 36 today, rising above the 30 level that some analysts gauge a stock is oversold for the first time since June 12.
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