@267. i hold many of my positions in stocks seasonally, so as to re-invest into payment for real estate which is my true love

The recent cabinet appointments have brought in two former bank CEOs making it unlikely for radical cabinet policy decisions that may rock the banking sector.

The Executive is also heavily invested in banking and would not create an unfavorable environment for banks. These highlights the banking sector as one of the sectors to watch at least for the next 5 years.

The following Banking stocks are worth a closer focus:

1. COOP BANK

EPS of Ksh 0.62 for Q1 2013 was a 33.5% rise as compared to Q1 2013 and a 29.2% rise as compared to Q4 2012. This was the highest growth in EPS for the Tier 1 banks that have so far reported.

Its merits as I indicated in post no.1 of this thread support my BUY recommendation on this share.

The share is also trading cum dividend (Dividend of Ksh 0.50) until 23rd of May. It will be interesting to see whether the share can touch the Ksh 18 price before books close next week Thursday.

In the next 3 months and as the Tier 1 banks trailing P/E approaches 11; the share price for Coop Bank should approach the Ksh 20 price especially if the half year earnings are as positive as the Q1 results.

My price target (next 10 months) is a price of Ksh 28.00 (65% upside potential) based on an estimated EPS of Ksh 2.70 for year ending December 2013 (The Q1 2013 EPS OF Ksh 0.62 supports my revised estimated EPS of 2.70 for the full year).

2. EQUITY BANK

The EPS of Ksh 0.87 for Q1 2013 was a 21.9% y/y increase.
The banks’ loan book is expected to rise over the remaining part of the year based on more stable macroeconomic conditions.

The bank has a ROE of 29.5% against a sector average of 26.3% (KCB ROE is 23%)
My price target for Equity Bank over the next 12 months is Ksh 48 (EPS of Ksh 4, at a P/E of 12).

3. CFC STANBIC BANK

Despite the poor ROE of 11%, it is currently trading at a P/E of 7.90 (if you factor in the rights issue shares).

It is a share that am holding purely as a short term speculative play awaiting the Q1 2013 results which if they mirror that of the other tier 1 banks, may easily push the share price to the Ksh 70 levels.

Short term Exit Price: Ksh 70

Happy Hunting.

Cfc Q1 made approx 1.1Bil, slightly off their internal target (cannot remember the figure) but have a positive outlook going ahead.I bank with them and hold the stock; asked the number at my local branch
As for co-op am a believer, tend to think the price shall rise towards H1 results
Lastly what do you think about diamond trust bank? Been gathering info on it and it looks like a ripe takeover target by a larger panafrican bank, or am I being too ambitious? Can agakhan sell out?

@stocksmaster..HFCK and KCB do not tickle you?

I cant agree more. .... i however notice you have avoided our Tier II banks

AgaKhan percentage holding in DTB is as follows:

1. Aga Khan Fund for Economic Development S.A. - 17.32%

2. The Jubilee Insurance Company of Kenya Limited - 10.50%

3. The Diamond Jubilee Investment Trust (U) Limited - 1.87%

>Also notable is that is that Mr. Amin Nanji Juma has 0.92% shareholding.



..... Qs to you

1. Is 'Guaranty Trust Bank Plc' the west african bank your are talking about?

2. Why do you think DTB is specifically the target?

I think you meant "Q1 2012" not "Q1 2013" & even though the PAT was +33.5% the EPS was +10% (comparing apples to apples) ... either coz of a bonus (issued after Q1 2012) or higher taxes. I need to research this.

@guru267, infact its easier to change or convince minds thats are all thinking alike or perhaps look alike.....the hydrocarbon game shall change a lot and premiums shall be paid.....do you know africa oil is starting drilling in Kenya and has a whooping 44 blocks in the region......the best is yet to come

@ mibbz

They are starting the 1st of 2 sites this half, really big difference between owning and start of drilling in Kenya