Morning Market Brief 27th November 2018

Corporate News:
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.    

Trading Expectation:
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.

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