Morning Market Brief 29th November 2018

Corporate News:
NIC Group Plc (NSE: NIC) 3Q18 Results
NIC Group Plc (NSE: NIC) announced a 4.1% y/y drop in 3Q18 profit after tax to KES 3.2Bn. Net interest income (NII) fell 5.9% y/y while Non-Interest Revenue grew by 7.2% y/y leaving operating income slightly down 2.2% y/y to KES 11Bn. Total operating expenses were muted (-2.1% y/y) at KES 6.7Bn mainly attributed to a 25.4% y/y decline in Loan Loss Provisions (LLP). Staff costs grew 8.8% y/y while other operating expenses also rose 8.4% y/y. Deposits grew 10.3% y/y while the loan book shrank by 3.1% y/y to KES 114.9Bn.
We maintain our BUY recommendation on NIC at a target price of KES 34.89. This represents an upside potential of 54.0% from the current market price of KES 22.65.

Trading Expectation:
Trading is still slow in the market with no clear movement as the holiday season starts to creep in. Trades are on the key index counters; Safaricom, Equity and KCB and the trend is expected to continue into the end of the week. No major movements in price expected on the counters with thin spreads on bids-asks for most shares.

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by Genghis Research