Morning Market Brief 27th November 2018
I&M Holdings Plc (NSE: I&M)Plc 3Q18 Results
I&M Holdings Plc (NSE: I&M) announced a 13.8% y/y growth in 3Q18 profit after tax to KES 5.9Bn. The increase was buoyed by Non-Interest Revenue which grew strongly at 38.4% y/y to KES 5.6Bn which countered the decline in Net Interest Income (NII) (4.2% y/y) to KES 10.3Bn. Consequently, operating income was up 7.4% y/y to KES 15.8Bn. Total operating expenses were muted (+1.7% y/y) at KES 8.2Bn mainly attributed to a 25.5% y/y decline in Loan Loss Provisions (LLP). Staff costs grew 10.5% y/y while other operating expenses rose 18.3% y/y. Deposits grew 26.4% y/y while the loan book expanded by 9.8% y/y to KES 163.3Bn. We recommend a BUY on I&M at a target price of KES 113.67. This represents an upside potential of 34.1% from the current market price of KES 84.75.
Turnover in the previous session ticked up slightly from Friday’s session to KES 686.5Mn. As expected, trading centred on the key index counters; Safaricom, Equity and KCB and in addition, EABL and I&M Holdings. In today’s session, we expect similar trading movements to Monday’s session with some activity still in I&M following their 3Q18 results announcement this morning. We still see demand for EABL which might persist yesterday’s uptick in price into today’s session.