With the holiday season rapidly approaching, investors might not be thinking all that much about their stock portfolios right now.The Kenyan Wallstreet believes that these four stocks, which span a wide diversity of industries and market caps, are worth taking the time out of your busy holiday schedule to check out.
The Nairobi Securities Exchange(NSE) 20 Share Index is down -18.31% in 2015 hence we believe this is a good opportunity to hunt for a bargain.
Read on to find out which stocks they are hot on this month on the Nairobi Securities Exchange and why we think they might be great additions to your portfolio.
1. KCB BUY at Target Price of Ksh 56
Price as at 15th Dec. Ksh 40.00
The Graph below shows KCB Share price performance since January 2015
REASONS FOR BUY RECOMMENDATION
- •KCB’s Q3 Profit Before increased by 9.6% to Ksh 19.3Billion, slower than the 13.1% reported in the First Half of 2015.
- •KCB recently announced it had received a license to open a representative office in Ethiopia. This gives the bank a chance to tap Africa’s second largest market by population.
- •KCB has signed up 3 universities to issue smart cards to students with HELB loans and is expected to earn commissions and obtain cheap deposits from the government.
2. Equity Bank at Target Price of Ksh 50.55
Price as at 15th Dec Ksh 40.00
The Graph below shows Equity Bank’s Share price performance since January 2015
REASONS FOR BUY RECOMMENDATION
- •In November Equity Bank management confirmed that the Bank’s deposit base had grown by Ksh 30 Billion attributed by shift of deposits from small banks due to the sudden closure of Imperial Bank that shook the market confidence in the fragile banking sector
- •Equity Bank Holdings’ Q3 2015 Pretax Profit increased by 14.4% to Ksh 18.1Billion
- •Equity’s subsidiaries continue to turn in good performances;
-Led by Rwanda & Tanzania that posted Profit Before Tax growths of 463% & 137% respectively.
-Equity Bank Profits from Kenya declined as a result of acquiring DRC business which now contributes 2.5% to Equity.
- •The DRC business is expected to benefit from an agreement with the DRC government to process civil servants payroll with Equity Bank targeting a Profit Before Tax of Ksh 1.6 Billion in Full Year 2016.
- •Equity Bank’s loan book grew by 28% to Ksh 263Billion as at Q3 2015.
While customer savings rose by 30% to Ksh 316Billion over the same period
- •Equity Bank recently received Ksh 5.6Billion from the European Investment Bank to support lending to SMEs. This will help support stronger loan growth to this highly lucrative segment.
- •Equity Bank already rolled out Equitel which will enable clients to send any amount of money to customers within the bank and up to Ksh 1Million from their mobile phones to other banks.
- •Equity Bank processed 74% of the loans disbursed in 2015 via Equitel.
In November’s Investor Briefing,Equity bank said 1.2 Million loans worth Ksh 5.4Billion were already processed through Equitel in the 10 months to October compared to 438,000 loans issued through credit officers in branches.Equitel already has 1.3Million subscribers of whom 88% are said to have activated mobile banking services.
- •Equity Bank plans to open a chain of clinics across Kenya to cash in on the increased demand in health care. This is expected to boost the lender’s bancassurance business.
3.Bamburi Buy at Target Price Of Ksh 217.00
Price as at 15th Dec Ksh 175.00
The Graph below shows Bamburi Cement Share price performance since January 2015
REASONS FOR BUY RECOMMENDATION
- •Bamburi Cement Half Year 2015 Earnings Per Share increased by 77% to Ksh 7.77
- •Bamburi Sales expected to rise as a result of
–infrastructure projects in Kenya
-political stability in Uganda, integral for export sales in Eastern DRC & South Sudan
-Cement consumption for the construction of Standard Gauge Railway and earlier the company disclosed that it sold more than 100,000 tones to China Road and Bridge Corporation (CRBC), the contractor for the Standard Gauge Railway
A stronger macro environment which will support lower lending rates and higher GDP growth is expected to drive cement consumption from individual home builders who account for over 80% of Bamburi’s cement sales.
- •Decline in global oil prices as well as lower cost of electricity in Kenya expected to reduce costs for Bamburi going forward. Additionally, further cost savings expected from the reduction in clinker imports and increased substitution of heavy fuel oil with petcoke.
4.Kenya-Re Buy at Target Price of Ksh 23.50
Price as at 15th Dec Ksh 21.25
The Graph below shows Kenya-Re Share price performance since January 2015
REASONS FOR BUY RECOMMENDATION
- •Kenya-Re Half Year Profit Before Tax increased by 23% to Ksh 2.1Billion.
-Gross written premiums grew by 26% to KES 4.9 Billion due to aggressive marketing in international markets.
-Investment income grew by 6% driven by capital gains from equity investments, interest from fixed income and rent from property
- •Kenya Re has a wide presence across Africa providing reinsurance services to more than 160 companies in over 45 countries in Africa, Middle East and Asia.
- •Kenya Re is planning to open an office in Zambia so as to smoothen its businesses in Southern Africa in order to grow profits.
- •Kenya Re’s latest acquisition of a minority stake in Africa Trade Insurance Agency (ATI) which operates in Kenya, Tanzania and Zambia adds an extra revenue stream and it will deepen its market presence.
- •Kenya Re rides on the guaranteed premium of 20%, recently increased from 18%, from Kenyan insurance companies offering it a steady flow of premiums.Furthermore,The Kenyan government has extended the duration for the mandatory cessions by 5 years to 2020.
Also Read; Healthy stocks to Buy at NSE that were affected by interest rates rise
Wishing you many more returns from wallstreet.
