NSE Shares To Buy: The Nairobi Securities Exchange has lately been cold, thanks to a drought of IPOs and the exit of thousands of retail investors who entered the market riding the IPO wave over a decade ago. Yet still stocks remain one of the key revenue earners for investors who keenly invest in listed companies.
Analysts at Kingdom Securities, a subsidiary of Cooperative Bank, this week look at four key stocks at the NSE and recommend investor to BUY. The analysis is interesting given that end of year results are streaming in, though with marked delays here and there due to Covid-19 disruptions.
EQUITY GROUP: Long-Term Buy
The lender gained 12% YTD from Ksh36.25 to Ksh40.75 and a 0.6% since FY-2020 announcement. Having not recommended a dividend payment for the financial year 2020, the company’s retained earnings spiked 23.9% up from Ksh92.77 billion to Ksh114.96 billion, which will enable the company enjoy liquidity and cushion it against the effects of the pandemic. With the rapid economic recovery and the new norm in the economy, we recommend a buy for long-term investors with a view of capital gains and dividend payment.
KCB GROUP: Long-Term Buy
The group issued a first and final dividend of Ksh1.00 whose book closure was on 26th April 2021 and will be paid on or before 26th June 2021. EPS for the lending company stands at 6.1 with a dividend payout of 16.4%. The group declared a 22.1% drop in PAT (profit after tax) from Ksh25.17Bn to Ksh19.60 billion.
The bank has an intention to acquire up to 100% of the issued share capital of Banque of Populaire Du Rwanda plc, which is a medium sized commercial bank in Rwanda whose PBT (profit before tax) for the FY-2020 was Ksh570.46 million. The group will also, once approved, acquire 100% of the issued share capital of African Banking Corporation Tanzania Ltd, which was downgraded from to CC+ TZ as at December 2019.
CIC GROUP: Short-Term BUY
With the counter nearly operating at its lowest at Ksh2.12 and as it recovers from the effects of the pandemic, we see an upward trajectory for the insurance company. As the economy opens, we forecast a price gain on the counter as Q1 results indicate a growth in the sector. We therefore recommend a buy for short-term investors aiming at capital gains as any upward price margin means netting in cash.
KENGEN CO.: Short-Term BUY
The energy company has gained 12.0% YTD (year-to-date) and eased 19.7% since result announcement. The company announced a dividend payment of Ksh0.30 per share after realizing a 19.8% improvement in PBT from Ksh11.60 billion to Ksh13.9Bn in the FY2020. The group’s EPS stands at 2.79 with a dividend payout of 10.8%. We recommend a buy on the counter for short-term investors to cash in on capital gains.