NSE | AIB Axys December 2023 Stock Picks

    November 2023 Review

    • Q3’23 Banking Sector Earnings Season - During the month, we had Q3’23 earnings results from the banking sector. ABSA Kenya posted a 14.86% y/y jump in PAT to KES 12.31Bn, driven by growth in net interest income. Standard Chartered Bank Kenya recorded 11.77% y/y climb in PAT to KES 9.74Bn with the announcement of an interim dividend of KES 6.00. NCBA registered a 14.39% y/y rise in PAT to KES 14.65Bn. Equity reported a mild 3.71% growth in PAT to KES 34.59Bn driven by an uptick in operating expenses. KCB Group posted a marginal 0.41% y/y growth in PAT to KES 30.72Bn compressed by a faster uptick in operating expenses. Co-operative recorded a 7.59% y/y rise in PAT to KES 18.39Bn driven by a resilient asset quality and enhanced efficiency.
    • Half Year Earnings Season - During the month we had HY’24 net earnings releases. Centum posted a 66.97% y/y reduction in net losses to KES 426.37Mn in HY’24. Nairobi Business Ventures results saw PAT soar by 8.3x to KES 32.25Mn from KES 3.87Mn in HY’23. Eaagads recorded a 188.87% slump in PAT to a loss of KES 33.10Mn. Williamson Tea posted a 101.42% jump in PAT to KES 477.11Mn – declaring an interim dividend of KES 10.00. Kapchorua Tea posted an impressive 87.76% increase in PAT to KES 218.10Mn accompanied with the declaration of a KES 10.00 interim dividend. Safaricom Group, registered a 10.06% decline in PAT to KES 27.19Bn driven by a quicker surge in operating expenses and finance costs.
    • Bamburi Sale of 70% stake in Hima Cement Ltd - During the month, Bamburi announced the sale of its 70% stake in Hima Cement Ltd, its Ugandan subsidiary, to Sarrai Group and Rwimi Holdings for USD 84Mn (KES 12.86Bn.) The cement manufacturer informed shareholders that the proceeds from the transaction will either be reinvested in the Kenyan unit or distributed to its proprietors, subject to capital allocation strategies by the board and management.
    • Centum Corporate Bond Early Payment - During the month, Centum made an early payment of its corporate bond valued at KES 2.96Bn. The interest accrued on the zero-coupon bond was paid together with the principal as a lump sum bullet. The project bond was employed to fund construction of its ongoing housing projects.
    • Local Pump Prices Marginally Decrease - EPRA announced the marginal decrease of Kerosene and Diesel pump prices. Petrol will retail at KES 217.36/litre (KES+0.00), diesel at KES 203.47/ litre (KES -2.00) and kerosene at KES 203.06/litre (KES -2.00). The regulator noted that the government opted to stabilize pump prices for the cycle by compensating suppliers using resources within the current resource's envelope.
    • Inflation Decreased Marginally - The headline inflation for the month of November decelerated to 6.80% from 6.90% in October. Inflation remains within CBK’s target range of 2.50%-7.50%. Food inflation decreased to 7.60% from 7.80% in October. Housing utilities increased to 8.50% y/y with transport being maintained at 13.60%. Non-Food-Non- Fuel (Core Inflation) decreased to 3.30% from 3.60% in October. The CPI increased 23bps to 137.03 from 136.71 in October. We expect headline inflation to remain under pressure but within CBK’s target at least until end of Q1’24.
    • Shilling Continued Losing Streak Against USD- The Kenya shilling depreciated further against the USD to close at KES 153.15 versus KES 150.56 at the end of October. We observed a faster decline in the month of November (- 1.72%) compared to October (-1.66%). . We expect the volatility on the local currency to ease due to replenished balance of payments account, supported by stabilizing dollar inflows from diaspora remittances and key export-earning sectors. However, rising external debt-service commitments, coupled with the ballooning import bill poses downside risks for the shilling.


    What does December '2023 Hold ?

    • December MPC Meeting – The next meeting of the Monetary Policy Committee (MPC) will be held on 05th December 2023. We foresee the MPC maintaining the CBR rate at 10.50% with the the committee considering impact of the previous hike as well as the prevailing macro factors.
    • Listed Companies AGM – In the month of December 2023, Carbacid Plc and Unga Plc will hold their AGMs via electronic means.


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    AIB-AXYS Africa Ltd is the fusion of two established companies; AIB Capital Limited and Apex Africa Capital Limited, both with over 25 years of experience in the Securities market. With the solid reputation and experience of the professional teams, we leverage talent and networks to better service businesses and investors looking to capitalize on the African growth story, and its vibrant financial sector.
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