Genghis Capital Recommendations — 30/01/2013

The recommended buys of the day :-

· Pan African Insurance at Kes. 39.25 per share, this counter was yesterday’s big loser and a 5% profit at Kes. 43 per share is very achievable. The company has the largest market share in the insurance industry and has consistently posted good results, this coupled with their CEO being named the best CEO of 2012 makes the counter a good short term and long term buy.


· Centum at below Kes. 14. This company’s book valuation is pegged at Kes. 20 a share. This counter is also a lagging counter, meaning the gains made on the NSE in 2012 are expected to mirror in their performance this year. Their share price has historically been very sensitive to their year on year performance.


· DTB at Kes. 124. This bank has a formidable management team and the shareholders mostly have a buy and hold strategy hence making supply of the counter minimal. The rules of demand and supply hence work to expect an appreciation in price levels of the same.


· Kenya RE at below Kes.12. This company has a book valuation of Kes. 15.35 a share. 35% of their income comes from real estate, comprised mostly of rental income, this is one of the most stable sources of income and goes ahead to rebalance their top line from heavy dependence on insurance premiums. Another fact is that performance of most insurance companies lag the stock market, meaning that the recent gains made in the NSE will be mirrored in the next year’s performance, especially considering Kenya- Re owns 4% of the blue chip EABL.


· HFCK: Fundamentally, Housing Finance have the biggest market share of the local mortgage industry which stood at 28.3% as of December 2011. The company’s CAGR on its mortgage book over the last 5 years stands at 29.5% from Kes. 9 billion in 2007 to Kes.25.2 billion in 2011. Recently, their mortgage book increased by 8.7% from December 2011 to June 2012 despite the high prevailing interest rates during the period. Factoring in the prevailing lower interest rates, this growth is expected to increase. Furthermore the counter’s price increase is expected to be sustained from a technical analysis point of view.

Unbelievable reasons for recommending pan africa!!!! Brokers advising clients for a 5% profit and the ceo was voted the best last year. Now i know we are at the height of a bull. Appaling

where were these recommendations when these counters were even better priced less than 6 months ago.

Guys actually go to school to learn how to write such reccomendations! I last did business studies in class 7 many years ago and i believe my research is superior to such stories as Panafric have CEO of the year thus a 5% gain shall be forthcoming..... check the daily turnover of shares to see how long it shall take to accumulate 1 million shares

who still depends on stockbrokers for investment advice? Scratching my head!

He he...newspaper writers....this report will be quoted in our beloved daily in the next few days