In the spirit of sharing am with Suntra and the following is their buy list for this week

Buy List
Stock Comment

1.Britam
The second largest composite insurer in the country had a good first half of 2012 where the
company recorded a surplus in operating activities as compared to a deficit for the first six months
to June 30th 2011, the company is expected to announce strong results for the year 2012 and this
means the share price is likely to rally at some point to reflect the value of the share which should
be a higher multiple of its book value which is currently at 1.08X to reflect earning power of the
company.

2.Liberty Kenya
Holdings
The insurance company in its HY12 earnings saw a 23% decline due to the high borrowing cost as
interest rates trended high as well as inflation hence affecting the valuation of the groups’
investment negatively. The current economic environment suggests sectoral improvement going
by the downwards trend of inflation (3.2% YoY as at December 2012) and interest rates. This is
further expected to translate to improved valuations and earnings for the company in the second
half of the year. The share is trading at 0.92X its book value which seems undervalued when one
considers that the company achieved an ROE of 21% in the year to Dec 31st 2011.

3.CFC Stanbic Holdings
The share of the bank-holding company looks very attractive as it trades at a discount on book
value. The latest press reports suggest that CFC Stanbic Bank has had a strong first 9 months of
2012 recording a 51.55% increase in profitability. This performance is likely underpinned by a
strong corporate banking business and it seems like the bank’s weak link, its retail banking
business, is turning around.

4.Mumias
The sugar milling company in the last year went through a top management change. The
company in its FY11/12 announced a marginal growth of 4% in its earnings due to decline in cane
availability. In the last half of their financial year, Mumias commissioned the ethanol and water
plants which are expected to contribute additional revenue for the company. This is expected to
reflect in its first half of 2012/13 financials which are likely to be released in the next one month or so. The share is currently trading at Kes 5.25 which is below its book value of Kes 10.28 suggesting some headway for the share price.

5.Carbacid Investments
The company’s trading environment is very much improved. As Africa in general and Kenya in
particular has seen expansion of production activities that will require increased use of carbon dioxide. As the company approaches the end of its half year, it will be interesting to see the
performance of the top line of the company and hopefully the bottom line as well. The company is
debt free, currently trades at close to 2.5X earnings and has been recording a general upward
trend in profitability as well as profits. It also has been giving generous dividends as a result of its
good performance.