6 November 2009

KESTREL CAPITAL
Member of the Nairobi Stock Exchange

Kenya weekly commentary
Kenya & Africa market summary
Description
Level
Kenya NSE20 Index 3,089.44
Kenya NASI
56.03
MSCI Frontier Mkts* 535.62
Botswana Index
7,304.66
Egypt Hermes Index 596.15
Ghana Index
5,408.65
Mauritius Index
1,660.96
Morocco MADEX
8,642.45
Namibia Index
721.94
Nigeria Index
21,517.29
FTSE/JSE Index
25,933.45
Tunis Tunindex
4,068.18

1w
0.19
1.49
-1.20
4.19
-6.48
0.56
-1.07
-1.24
-2.19
-1.32
-1.62
0.19

Local currency returns (%)
1m
Ytd
12m
2.28 -12.26
-23.22
2.45
-9.66
-19.62
-6.36 13.66
-9.89
6.17
3.83
-11.17
-98.51 39.56
26.00
-12.15 -48.15
-49.59
0.04 40.43
24.24
-1.53
-4.62
-14.02
9.23 29.78
30.10
-6.74 -31.58
-36.48
3.65 20.57
28.86
0.13 40.65
33.19

1w
0.51
1.82
-1.20
5.99
-6.29
0.52
-1.23
-0.55
2.05
-1.77
2.65
0.69

USD returns (%)
1m
Ytd
2.41
-8.52
2.59
-5.80
-6.36
13.66
5.02
17.55
-4.28
40.72
-10.74
-53.89
1.10
47.16
-0.94
0.61
7.12
62.30
-9.41
-36.94
1.65
50.77
0.35
43.32

Against USD
Against EUR
Against GBP
Foreign exchange Spot
1w 12m
Spot
1w 12m
Spot
1w
12m
Kenyan shilling
74.36 -1.12
-2.48 110.41 -0.25 13.86 123.54 -0.14
3.70
Botswana pula
6.68 -1.34 -15.01
9.91 -0.85 -0.94
11.09 -0.73
-9.77
Egyptian pound
5.47 -0.22
-0.92
8.12 0.65 15.68
9.08 0.76
5.36
New Ghanaian cedi 1.43 0.03 21.47
2.12 0.91 41.84
2.38 1.02 29.17
Mauritian rupee
30.30 0.16
-5.61
44.99 1.03 8.83
50.33 1.15
-0.87
Moroccan dirham
7.68 -0.65 -11.52
11.40 0.32 3.35
12.76 0.34
-5.87
Namibian dollar
7.54 -3.57 -26.73
11.19 -2.73 -14.53
12.52 -2.64 -22.11
Nigerian naira
151.59 0.46 28.73 225.07 1.33 50.29 251.83 1.45 36.89
South African rand
7.54 -3.57 -26.73
11.19 -2.73 -14.53
12.52 -2.64 -22.11
Tunisian dinar
1.29 -0.79
-6.71
1.91 0.04 8.86
2.14 0.21
-0.80
Source: Bloomberg, NSE, *The Namibian dollar is pegged to the South African rand.

12m
-21.89
-18.23
-9.89
4.69
27.32
-58.50
31.63
-4.18
74.25
-50.65
72.59
42.48

Volume
(USD m)
158
325,519
16
11
6,995
2,741
23,680
149

Against ZAR
Spot
1w 12m
9.87 2.60 33.15
0.89 1.99 15.86
0.73 3.47 35.23
0.19 3.77 65.85
4.02 3.93 27.26
1.02 3.06 20.86
1.00 0.00
0.00
20.12 4.23 75.76
1.00 0.00
0.00
0.17 2.92 27.36

Company announcements


Safaricom 1H10 net earnings up 17.8% y-o-y to KES 6.6bn
StanChart Bank 3Q09 net earnings up 44.8% y-o-y to KES 3.7bn
National Bank 3Q09 net earnings up 8.9% y-o-y to KES 972.9m

Notable events

The Kenya National Bureau of Statistics introduces new method for computing inflation
October inflation decelerates to 6.6% y-o-y

Equity market commentary


NSE 20 Index down 12.3% ytd to 3,089.44
NASI down 7.2% ytd to 68.12
Volumes traded at KES 974.0m for the week

Debt market commentary

91-day Treasury Bill down 3.2bp to 7.232%
Volumes traded at KES 1.5bn for the week

Kestrel Capital E.A. Ltd.
ICEA Building, 5th Floor
Kenyatta Ave.
P.O. Box 40005
00100 Nairobi, Kenya
Tel: +254 20 2251758
Fax: +254 20 2243264
info@kestrelcapital.com
www.kestrelcapital.com
Bloomberg
KEST <GO>
Equity Sales & Trading
Samuel Wachira
samuelw@kestrelcapital.com
Christine Kuria
christinek@kestrelcapital.com
Joseph Thiga
josepht@kestrelcapital.com
Research
Snehal Shah
snehals@kestrelcapital.com
Wycliffe Masinde
wycliffem@kestrelcapital.com
Gregory Waweru
gregoryw@kestrelcapital.com
Fixed Income & Operations
Andrew Mwangangi
andrewm@kestrelcapital.com
Abraham Too
abrahamt@kestrelcapital.com
Corporate Advisory
Vera Mungai
veram@kestrelcapital.com
Executive Director
Andre DeSimone
adesimone@africaonline.co.ke

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Safaricom
Un-Audited income statement for the period ended 31 September 2009
Share statistics
Price (KES)
Issued shares (m)
Market Cap (USD m)
Year end
High (KES)
Low (KES)

4.00
40,000
2,133
Mar
4.05
2.55

Price return
P/E ratio
Dividend yield
P/B ratio

14.6x
2.5%
3.0x

Income Statement (KES m)
Revenue
Operating expenditure
Gross Profit
SGA costs
EBITDA
Depreciation & Amortization
Operating Profit
Finance costs
Extra ordinary items
Pre tax profit
Taxation
Profit after tax
EPS (KES)
DPS (KES)
Source: Company

FY08
61,369
26,066
35,303
7,156
28,148
8,764
19,384
-491
1,048
19,945
-5182
13,853
0.35
0.05

y-o-y
FY09 % ch
70,480
14.8
32,788
25.8
37,692
6.8
9,741
36.1
27,951
-0.7
11,776
34.4
16,175
-16.6
-871
77.4
15,304
-23.3
-6,092
17.6
10,537
-23.9
0.26
0.1

-23.9
100

1H09
345,08
15,309
191,99
4194
15,005
5,432
9,573
-597
8,976
-2759
6,217

2H09
35,972
17,479
18,493
5,547
12,946
6,344
6,602
-274
6,328
-2008
4320

1H10
40,661
18,871
21,790
5,281
16,517
6,655
9,898
-7,64

y-o-y
%ch
17.8
23.3
13.5
25.9
10.1
22.5
3.4
28

h-o-h
% ch
13.0
8.0
17.8
-4.8
27.6
4.9
49.9
178.8

9,134
-25,02
6,632

1.8
-9.3
6.7

44.3
24.6
53.5

0.16
-

0.11
0.1

0.17
-

8.1

55.6

Safaricom Ltd released 1H10 results, posting a 6.7 % y-o-y and 53.5% h-o-h rise in net earnings
to KES 6.6bn, attributable to a 17.8% y-o-y acceleration in revenues to KES 40.7bn. The
following are the highlights from the results:

Revenues were driven by a 93.6% growth in data and M-Pesa revenues to KES 7.2bn. Data
revenues constituted 17.7% of total revenues (compared to 10.8% in 1H09). Voice revenues
were up 6.2% to KES 31.6bn. Revenue market share was reported at 83% while subscriber
market share was at 77.0%, down from 79.1% in March 2009.

The blended ARPU contracted 7.1% y-o-y to KES 466.50, spurred by increased mobile
penetration to rural areas and lower tariffs across the industry. Subscriber churn remains
below industry average but increased to a blended churn of 27.6% compared to 24.3% in
March 2009.

EBITDA increased 10.1% y-o-y and 27.6% h-o-h to KES 16.5bn. The EBITDA margin was
down 286bp to 40.6%. This was attributed to rising opex, (due to increased network costs as
a result of increased network roll out and fuel costs, customer acquisition costs and higher
interconnection costs) as well as a steep increase in SGA costs, which grew 44.4% y-o-y.
Depreciation and amortisation costs grew 22.5% to KES 6.7bn. Consequently, the operating
margin declined by 340bp to 24.3%. Financing costs were reported at KES 764m, up 28%
from the previous year.

Shareholders’ funds grew 14.8% to KES 53.8bn while total assets grew 21.5% to KES
97.1bn. Net borrowings increased to KES 11.9bn, up from KES 3.1bn in 1H09. Consequently, the debt to equity ratio increased to 29.6% compared to 19.0% in 1H09.

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Safaricom’s key earnings drivers
KES m
Subscribers (m)
Blended ARPU (monthly)
Revenue from voice
Revenue (SMS & other data)
Revenue from acq. and other
Total revenue
Opex
SGA costs
EBITDA
Depreciation
Amortisation
Operating Profit
Source: Company

1H08
7,956
665
25,384
2,112
873
28,650
12,128
3,541
12,981
3,861
163
8,957

2H08
10,200
616
28,819
2,390
942
32,614
13,938
3,614
15,062
4,473
267
10,322

1H09
11,956
503
29,716
3,720
1,072
34,508
15,309
4,197
15,005
5,432
9,573

2H09
13,363
475
29,079
5,377
1,516
35,972
17,479
5,547
12,946
6,344
6,602

1H10
14,510
467
31,553
7,203
1,554
40,661
18,871
5,281
16,517
6,655
9,898

Cash generated from operations (KES 7.5bn) was 22.3% lower compared to the previous
year due to working capital movements relating to outstanding capital creditor payments.

Going forward, we expect the voice market to remain highly competitive, which will also be
exacerbated by the introduction of number portability. However, we expect the benefits of
increased data uptake following the fibre optic connectivity to culminate to accelerated data
revenues, offsetting the declining voice ARPU’s. We note that the distinct data users have
grown significantly to 1.8m (compared to 1.5m in March 2009).
Safaricom recorded a 21.4% y-o-y subscriber growth to 14.5m, with the country’s mobile
penetration rate at 47%. Further, M-Pesa continues to exhibit a high success rate with the
subscribers numbers hitting 8.0m in September 2009 compared to 6.5m reported in March
2009. Indeed, M-Pesa revenues grew 247.5% within the period and we expect this revenue
segment to drive revenue growth in FY10.
Data services to corporate customers is also a key initiative being pursued with the recent
acquisition of Packet Stream Ltd and the joint venture with Jamii Telecom, which will
enable Safaricom to provide such services through a multiplicity of platforms (3G, Wimax
and fibre).
The company used KES 8.5bn in capex during the year, increasing their 2G base stations to
1,972 from 1,741 in the previous year. Safaricom also increased 3G enabled base stations to
384. Total capex since inception now stands at KES 128.3bn. The company is raising KES
12bn in local currency medium term notes to fund expansions over the next year.

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

StanChart Bank
Audited income statement for the period ended 31 July 2009
KES m

Share statistics
Price (KES)
Issued shares
Market Cap (USD m)
Year end
High (KES)
Low (KES)

147.00
533.1m
151.4
Dec
179.00
129.00

Price return
P/E ratio
Dividend yield
P/B ratio

9.1x
6.8%
3.1x

9M08

4Q09

1Q09

2Q09

Interest income
5,522
Loans and advances
3,395
Govt securities
1,690
Other income
72
Deposits & bals from banks
366
Interest expense
1,126
Customers deposits
950
Deposits &bals due to banks 175
Net interest income
4,397
Fees & commission income 1,577
Net forex income
1,428
Other operating income
106
Total other operating income 3,111
Total operating income
7,508
Operating expenses
3,526
Net op income before provs 3,982
Bad and doubtful debts
291
Net operating income
3,691
Taxation
(1,152)
Net income
2,539
Source: Company

2,165
1,405
556
22
182
443
416
27
1,722
5,795
346
221
947
2,669
1,499
1,170
141
1,029
(317)
711

2,074
1,321
566
19
168
393
371
21
1,681
5,133
465
612
1,039
2,720
1,151
1,570
76
1,494
(460)
1,035

2,331
1,444
645
11
232
465
442
24
1,866
6,778
466
2,359
1,380
3,246
1,309
1,936
95
1,841
(538)
1,303

3Q08

9M09

q-o-q
% ch

y-o-y
% ch

3,567 4,405 2,436
2,127 2,765 1,470
1,153 1,210
840
70
30
9
217
400
116
737
858
482
631
813
442
105
45
40
2,830 3,547 1,954
10,009 11,911 (10,128)
912
931
457
437 2,972 (2,427)
1,956 2,419 1,297
4,786 5,966 3,251
2,317 2,460 1,256
2,470 3,506 1,995
148
170
129
2,321 3,336 1,866
(727) (998) (527)
1,594 2,338 1,339

6,841
4,235
2,050
39
516
1,340
1,255
85
5,501
1,783
1,388
545
3,716
9,217
3,716
5,501
299
5,202
(1,525)
3,677

4.5
1.8
30.2
(13.9)
(49.9)
3.6
(0.0)
65.3
4.7
(249.4)
(1.8)
(202.9)
(6.0)
0.2
(4.0)
3.1
35.6
1.4
(2.0)
2.8

23.9
24.8
21.3
(45.4)
41.2
19.0
32.0
(51.7)
25.1
13.1
(2.8)
413.9
19.5
22.8
5.4
38.1
2.7
40.9
32.5
44.8

1H08

1H09

Standard Chartered Bank of Kenya (‘Stanchart Bank’) experienced significant growth despite the
current weak economic environment and exceeded consensus estimates by far with y-o-y earnings growth of 44.8%.
This was driven by increased activity in most business segments and steady asset growth in
2008. Net interest income was up 25.1% to KES 5.5bn y-o-y driven by interest income from
loans and advances. The bank’s net loan book was up 17.8% to KES 48.4bn during the period
under review. Non interest income was up 19.5% y-o-y to KES 9.2bn which was due to a steep
rise in other operating income. The bank’s operating costs went up 5.4% and the cost to income
ratio was 40.3% (compared to 47.0% in the previous year)
As with previous years, Stanchart Kenya’s loan loss provision was minimal at KES 298.8m with
a minor decrement in total NPL’s (from KES 580.6m in 9M08 to 576.6m in 9M09). StanChart’s
conservative lending policy in the past appears to have cushioned it from a significant increase in
default rates.

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

National Bank
Un-Audited income statement for the period ended September 2009
KES m

Share statistics
Price (KES)
Issued shares
Market Cap (USD m)
Year end
High (KES)
Low (KES)

32.75
200.0m
129.7
Dec
46.25
28.00

Price return
P/E ratio
Dividend yield
P/B ratio

5.0x
0%
1.1x

Interest income
Loans and advances
Total Government Securities
Deposits and balances from banks
Interest expense
Customers deposits
Deposits and balances due to banks
Net interest income
Fees and commission income
Net income from forex activities
Other operating income
Total other operating income
Total operating income
Staff expenses
Occupancy expenses
Depreciation on property and equipment
Other expenses
Operating expenses
Net operating income before provisions
Bad and doubtful debts
Net operating income
Taxation
Profit after tax and exceptional items
Source: Company

9M08
2,929
785
2,022
122
605
585
20
2,324
927
230
407
1,563
3,887
1,328
41
130
677
2,175
1,712
(358)
1,354
(460)
894

1Q09

2Q09

3Q09

9M09

q-o-q
% ch

y-o-y
% ch

1,033
335
686
12
224
219
5
809
337
74
94
505
1,313
469
27
50
240
824
489
(51)
438
(131)
307

1,097
407
681
9
223
209
14
874
346
87
186
619
1,493
556
16
50
245
852
640
(76)
564
(169)
395

1,148
428
704
16
342
338
5
806
306
69
99
473
1,279
(911)
18
50
282
864
415
13
428
(157)
271

3,278
1,170
2,072
37
790
766
24
2,488
989
229
379
1,597
4,085
114
61
151
767
2,541
1,544
(114)
1,431
(458)
973

4.7
5.3
3.4
74.8
53.5
62.0
(68.9)
(7.8)
(11.5)
(20.7)
(47.0)
(23.5)
(14.3)
(264.0)
9.0
(0.0)
14.8
1.4
(35.1)
(117.1)
(24.1)
(7.2)
(31.3)

11.9
48.9
2.5
(69.9)
30.5
30.8
20.2
7.1
6.7
(0.1)
(6.9)
2.1
5.1
(91.4)
50.0
15.8
13.3
16.8
(9.8)
(68.2)
5.7
(0.6)
8.9

National Bank of Kenya (‘NBK’) released its 3Q09 results in which the bank posted an 8.9%
increase in net profits to KES 972.9m y-o-y. This however represented a 31.3% decline q-oq. Interest income for the nine months grew 11.9% to KES 3.3bn, a 4.7% increase q-o-q. The
bank’s loan book grew by 48.9% to KES 12.02bn y-o-y. Customer deposits also went up 30% to
KES 41.4bn during the same period.
Total operating income increased 5.1% to KES 4.1bn as operating expenses went up by 16.8% to
KES 2.5bn. Net interest income was up 7.1% to KES 2.5bn. NBK which has been on a steady
recovery after loss incurred in the 1990’s hopes to start paying dividends from next year after
clearing the accumulated losses by the end of this year. Plans by the government to divest further
have been delayed as the matter is still pending with the Privatization Commission. In total, the
Government owns a 70.55% stake in the bank (22.5% through Treasury and 48.05% through
National Social Security Fund). The plan was to sell off a 25% stake to a strategic investor before floating more shares to the public through the stock exchange.

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Notable events
The Kenya National Bureau of Statistics introduces new method for computing inflation
The Kenya National Kenya Bureau of Statistics (‘KNBS’) has introduced a new method for computing inflation. Previously, the CPI and inflation figures were computed based on arithmetic
mean, which has been replaced with a geometric mean approach. The argument for changing
the method is based on the fact that the previous method tends to exaggerate upward movements
in inflation and disproportionately depicts reversals in inflation rate. This is because the method
is influenced by outliers, thus introducing an upward bias in the CPI. However, the CPI weights
are based on the same basket of goods obtained during the 1994 Household budget survey . The
KNBS intends to release new CPI figures from February 2010 based on the new weights and
baskets from the 1995 Kenya Integrated Household Budget Survey which depicted a shift in consumer spending patterns. Consequently, the number of items in the CPI commodity basket is set
to increase from 216 to 234 and the weights will change as follows:
Category
Food & non-alcoholic drinks
Alcohol & Tobacco
Clothing& Footwear
Housing costs
Fuel and power
House-hold goods & services
Medical goods & services
Transport & communication
Recreation and education
Personal goods

Current Weights (%)*
50.5
2.8
9.0
11.7
4.2
5.8
1.6
5.8
6.1
2.5

New weights (%)
40.3
2.0
7.3
13.7
6.9
4.1
3.1
12.7
5.7
4.2

Source: KNBS, * Rounded to nearest 0.1%

October inflation decelerates to 6.6% y-o-y
The Consumer Price Index (CPI) and inflation figures for the month October 2009 using a geometric computation method show that y-o-y overall inflation rate has decreased to 6.6% from
6.7% in month of September 2009. The previous arithmetic mean method would have given an
inflation rate of 17.9%, down from 17.9% in September. The CPI increased by 0.5% from
140.51 points in September to 345.03 points in October. The food and non-alcoholic index increased 0.6% in October to 158.15 points compared to the previous month. The index, which
constitutes 50.5% of the CPI, is up 25.2% from the previous year. The fuel and power index
increased 1.0%, mainly due to a 12.6% rise in the cost of electricity.

Kenya weekly commentary
Week ending 6 November 2009

Top Gainers (w-o-w %)
Company
Carbacid
Jubilee Insurance
StanChart Bank
BAT Kenya
Centum Investments

Gainers %
106.6
6.0
3.5
2.9
2.8

Top Losers (w-o-w %)
Company
BOC (K)
Car & General
Olympia Capital
Rea Vipingo
Total Kenya

Losers %
-7.5
-4.8
-4.6
-4.2
-3.4

Top Traders
Company
Safaricom
EA Breweries
Athi River Mining
Kenya Power
Equity Bank
Bamburi
BAT Kenya
Mumias Sugar
KCB Bank
Kenya Airways

KES m
180.3
142.6
120.3
106.1
98.5
56.8
56.7
36.2
29.1
21.4

KESTREL CAPITAL

Equity market trading commentary
The market was on a slow paced upward trend with the NSE 20 index gaining a 0.19% to close
at 3,089.44. Turnover for the week stood at KES 974.0m with trading characterized by strong
local institutional presence particularly on Bamburi Cement, Kenya Power, EA Breweries and
British American Tobacco . There was heavy foreign buying on EA Breweries and Safaricom
while mild buying took place on Equity Bank and Kenya Airways.
Carbacid soared 106.6% supported by heavy demand after the counter commenced trading on
Wednesday after the long standing suspension was rescinded. The company had earlier announced a bonus of 2:1 , final dividend of KES 5.00 and a special dividend of KES 5.00.
Safaricom remained unchanged at the KES 4.00 level, supported by continued foreign demand
for the stock as earnings were in line with expectations. StanChart Bank was up 3.5% to KES
147 after investors responded positively to buoyant 3Q09 earnings, which were far ahead of
peers.
The cement stocks witnessed increased appetite, with high foreign demand for Athi River Mining while Bamburi Cement drew interest from local investors. Athi River Mining traded flat at
KES 98.50 while Bamburi Cement edged up 1.9% to KES 165.00.
Market performance over the past 12 months

NSE 20 Index
Top Gainers (ytd %)
Company
Carbacid
Williamson Tea
Kakuzi
BAT Kenya
Kapchorua

4,500 

Gainers%
106.6
50.4
41.3
37.4
17.6

4,000 
3,500 
3,000 
2,500 
2,000 
1,500 
1,000 

Top Losers (ytd %)
Company
Eaagads
Centum Investments
Unga
Olympia Capital
CMC Motors
Source: NSE

500 

Losers %
-45.2
-41.9
-40.8
-37.5
-37.2


7‐Nov‐08

Source: NSE

6‐Feb‐09

8‐May‐09

7‐Aug‐09

6‐Nov‐09

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Debt market trading commentary
The Central Bank offered the 91 day T-Bill, which registered a subscription rate of 219%. The
91-day T-Bill rate stood at 7.232%, an increase of 3.2bp from the previous auction. The Government had offered Treasury bills worth KES 2.5 and received bids totaling to KES 5.5bn. The
average rate per KES 100 nominal was KES 98.229. The Kenyan debt market will mark
a milestone in the coming week with the introduction of automated bond trading at the
NSE . The KenGen bond will be the first bond to trade on the system.
Kenya government debt yield curve
17

Yield Curve: 07 November 2008

Yield Curve: 06 November 2009

16

Historical 91-day T-bill rate
9.0%
8.5%

15
14

8.0%

13
12
11

7.5%

10
9

7.0%

8
7

6.5%

6
0.3 1.5 2.8 4.0 5.3 6.5 7.8 9.0 10.3 11.5 12.8 14.0 15.3 16.5 17.8 19.0

Nov-08

Feb-09

May-09

YEARS

Trades for the week ending 6 Nov 2009
Date
2-Nov-09

Amt (KES m)
Price %
Issue
10.0
94.0972 FXD1/2009/10Yr
100.0
93.3263 FXD1/2009/15Yr
3-Nov-09
0.1
94.4296 FXD 1/2009/5Yr
300.0
93.0286 FXD1/2009/15Yr
12.0
93.3292 FXD1/2009/15Yr
100.0
93.0263 FXD1/2009/15Yr
4-Nov-09
200.0
96.6135 FXD 3/2008/5Yr
200.0
93.0268 FXD1/2009/15Yr
15.0
93.3286 FXD1/2009/15Yr
2.2
102.3678 IFB 1/2009/12Yr
15.0
93.6268 IFB 1/2009/12Yr
20.0
101.6360 IFB 1/2009/12Yr
5-Nov-09
8.4
94.0983 FXD1/2009/10Yr
4.0
96.8842 FXD3/2007/15Yr(
200.0
93.0253 FXD1/2009/15Yr
30.0
93.7148 FXD1/2009/15Yr
100.0
93.0269 FXD1/2009/15Yr
0.5
93.9282 FXD1/2009/15Yr
6-Nov-09
0.2
98.3788 FXD1/2008/15Yr
20.0
93.1743 FXD1/2009/15Yr
Total
1,537.3
Source: NSE

Cpn %
10.75
12.50
9.50
12.50
12.50
12.50
9.50
12.50
12.50
12.50
12.50
12.50
10.75
12.50
12.50
12.50
12.50
12.50
12.50
12.50

Key interest rates (%)

30-Oct-09

06-Nov-09

14.76
3.20
7.26
5.00
7.75

14.76
7.33
7.23
5.00
7.75

Average Base Lending Rate (Key banks)
Inter-Bank Overnight Range
3-Month Treasury Bill Rate
3-Month KES Deposit Rate
Central Bank of Kenya Rate (CBR)
Source: CBK

Mat. date
15-Apr-19
7-Oct-24
15-Sep-14
7-Oct-24
7-Oct-24
7-Oct-24
19-Aug-13
7-Oct-24
7-Oct-24
8-Feb-21
8-Feb-21
8-Feb-21
15-Apr-19
7-Nov-22
7-Oct-24
7-Oct-24
7-Oct-24
7-Oct-24
13-Mar-23
7-Oct-24

Yrs
9.5
15.0
4.9
15.0
15.0
15.0
3.8
15.0
15.0
11.3
11.3
11.3
9.5
13.0
15.0
15.0
15.0
15.0
13.4
15.0

YTM %
11.80
13.55
11.00
13.60
13.55
13.60
10.60
13.60
13.55
12.00
13.50
12.15
11.80
13.00
13.60
13.58
13.60
13.45
12.75
13.58

Aug-09

Nov-09

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Government bond statistics
ISIN
KE1000000941
KE1000001063
KE1000001530
KE1000001121
KE1000000958
KE1000001619
KE1000001139
KE1000000891
KE1000001647
KE1000001188
KE1000001668
KE1000000966
KE1000000974
KE1000001147
KE1000001196
KE1000001071
KE1000000982
KE1000001204
KE1000001238
KE1000001089
KE1000001246
KE1000000990
KE1000001006
KE1000001097
KE1000001394
KE1000001154
KE1000001436
KE1000001105
KE1000001261
KE1000001279
KE1000001544
KE1000001578
KE1000001162
KE1000001212
KE1000001170
KE1000001220
KE1000001253
KE1000001287
KE1000001287
KE1000001295
KE1000001311
KE1000001303
KE1000001313
KE1000001527
KE1000001329
KE1000001555
KE1000001656
KE1000001337
KE1000001345
KE1000001352
KE1000001360
KE1000001428
KE1000001493
Source: Bloomberg

Description
FXD1/2005/5Yr KENGB 12 1/2 06/14/10
FXD2/2004/6Yr
KENGB 6 3/4 07/19/10
FXD3/2008/2Yr
KENGB 8 3/4 08/23/10
FXD2/2003/7Yr
KENGB 6 1/2 10/18/10
FXD2/2005/5Yr
KENGB 13 11/22/10
FXD4/2008/2Yr
KENGB 8 3/4 12/27/10
FXD1/2004/7Yr
KENGB 6 3/4 01/17/11
FXD1/2007/4Yr
KENGB 11 02/21/11
FXD1/2008/20Yr
KENGB 8 3/4 03/21/11
FXD1/2003/8Yr KENGB 12 1/2 04/18/11
FXD2/2009/2Yr
KENGB 8 3/4 05/23/11
FXD1/2006/5Yr KENGB 11 3/4 05/23/11
FXD2/2006/5Yr KENGB 11 1/4 07/25/11
FXD2/2004/7Yr
KENGB 7 08/15/11
FXD2/2003/8Yr
KENGB 7 09/19/11
FXD1/2005/6Yr
KENGB 13 12/19/11
FXD1/2007/5Yr KENGB 11 1/4 01/23/12
FXD1/2004/8Yr
KENGB 7 1/2 03/12/12
FXD1/2003/9Yr KENGB 12 3/4 05/14/12
FXD1/2006/6Yr KENGB 11 3/4 06/18/12
FXD2/2003/9Yr
KENGB 9 1/2 07/16/12
FXD2/2007/5Yr
KENGB 9 1/2 08/20/12
FXD3/2007/5Yr
KENGB 9 1/2 09/17/12
FXD2/2006/6Yr KENGB 11 1/2 11/19/12
FXD1/2008/5Yr
KENGB 9 1/2 01/21/13
FXD1/2006/7Yr KENGB 13 1/4 01/21/13
FXD 2/2008/5Yr
KENGB 9 1/2 04/22/13
FXD1/2007/6Yr KENGB 11 1/2 04/22/13
FXD1/2003/10Yr KENGB 13 1/4 06/10/13
FXD2/2003/10Yr
KENGB 8 1/2 08/12/13
FXD 3/2008/5Yr
KENGB 9 1/2 08/19/13
FXD 4/2008/5Yr
KENGB 9 1/2 10/21/13
FXD2/2006/7Yr
KENGB 12 12/16/13
FXD1/2006/8Yr KENGB 13 1/4 02/17/14
FXD1/2007/7Yr
KENGB 9 3/4 07/21/14
FXD1/2007/8Yr KENGB 12 3/4 02/16/15
FXD1/2006/9Yr KENGB 13 1/2 04/13/15
FXD1/2006/8Yr
KENGB 14 03/14/16
FXD1/2006/10Yr
KENGB 14 03/14/16
FXD2/2006/10Yr
KENGB 14 05/16/16
FXD1/2006/11Yr KENGB 13 3/4 09/11/17
FXD1/2007/10Yr KENGB 10 3/4 10/16/17
FXD1/2008/10Yr KENGB 10 3/4 02/12/18
FXD2/2008/10Yr KENGB 10 3/4 07/16/18
FXD1/2006/12Yr
KENGB 14 08/13/18
FXD3/2008/10Yr KENGB 10 3/4 09/17/18
FXD1/2009/10Yr KENGB 10 3/4 04/15/19
FXD1/2007/12Yr
KENGB 13 05/13/19
FXD1/2007/15Yr KENGB 14 1/2 03/07/22
FXD2/2007/15Yr KENGB 13 1/2 06/06/22
FXD3/2007/15Yr KENGB 12 1/2 11/07/22
FXD1/2008/15Yr KENGB 12 1/2 03/13/23
FXD1/2008/20Yr KENGB 13 3/4 06/05/28

Issue Years to
Date Maturity
6/20/2005
0.60
7/26/2004
0.70
8/25/2008
0.80
10/27/2003
0.95
11/28/2005
1.05
12/29/2008
1.14
1/26/2004
1.20
2/26/2007
1.30
3/23/2009
1.37
4/28/2003
1.45
5/25/2009
1.55
5/29/2006
1.55
7/31/2006
1.72
8/23/2004
1.78
9/29/2003
1.87
12/26/2005
2.12
1/29/2007
2.22
3/22/2004
2.35
5/26/2003
2.53
6/26/2006
2.62
7/28/2003
2.70
8/27/2007
2.80
9/24/2007
2.87
11/27/2006
3.05
1/28/2008
3.22
1/30/2006
3.22
4/28/2008
3.47
4/30/2007
3.47
6/23/2003
3.60
8/25/2003
3.78
8/25/2008
3.80
10/27/2008
3.97
12/25/2006
4.12
2/27/2006
4.30
7/30/2007
4.72
2/26/2007
5.30
4/24/2006
5.45
3/27/2006
6.37
3/27/2006
6.37
5/29/2006
6.55
9/25/2006
7.87
10/29/2007
7.97
2/25/2008
8.30
7/28/2008
8.72
8/28/2006
8.80
9/29/2008
8.89
4/27/2009
9.47
5/28/2007
9.55
3/26/2007
12.37
6/25/2007
12.62
11/26/2007
13.05
3/31/2008
13.39
6/30/2008
18.64

Mkt Val
KES m
1,963
2,514
3,668
3,055
6,544
3,190
2,574
3,548
8,582
4,212
6,137
2,049
2,815
1,692
4,942
8,284
2,944
2,856
2,700
6,552
8,189
4,565
9,006
6,186
7,058
3,622
3,756
6,234
3,413
6,051
14,000
3,971
2,473
3,575
7,950
2,877
3,389
3,866
3,866
6,080
4,454
8,745
2,858
838
4,437
3,782
4,462
5,658
8,029
8,347
17,684
6,943
1,866

Price
102.56
99.10
100.29
98.34
104.33
100.14
97.91
102.66
99.96
104.99
99.72
103.98
103.59
96.59
96.42
107.02
103.86
95.85
106.67
104.60
99.48
98.94
98.92
103.46
98.22
108.31
97.88
103.61
108.60
94.12
97.17
97.08
104.89
109.02
96.69
107.47
110.69
113.22
113.22
113.24
112.25
96.90
96.28
95.90
113.27
95.60
94.91
107.34
113.15
106.28
98.72
97.91
99.29

Accrued
Interest
4.88
1.98
1.73
0.29
5.82
3.08
1.98
2.18
1.01
0.55
3.92
5.26
3.03
1.52
0.85
4.82
3.09
1.05
5.88
4.36
2.79
1.88
1.15
5.15
2.61
3.64
0.23
0.28
5.17
1.84
1.88
0.23
4.45
2.62
2.68
2.52
0.59
1.69
1.69
6.27
1.66
0.27
2.13
2.95
2.77
1.09
0.27
5.82
1.75
5.01
5.60
1.27
4.84

YTM
8.07
8.07
8.34
8.34
8.60
8.60
8.60
8.77
8.77
8.77
8.94
8.94
8.94
9.11
9.11
9.28
9.28
9.49
9.71
9.71
9.71
9.93
9.93
10.15
10.15
10.15
10.24
10.24
10.33
10.41
10.41
10.41
10.50
10.58
10.65
10.85
10.85
11.05
11.05
11.10
11.35
11.35
11.45
11.50
11.55
11.55
11.65
11.70
12.39
12.49
12.70
12.83
13.85

Modified Macaulay
Duration Duration
0.55
0.58
0.67
0.69
0.75
0.78
0.91
0.94
0.91
0.94
1.04
1.07
1.11
1.15
1.17
1.21
1.26
1.30
1.30
1.35
1.37
1.39
1.33
1.34
1.50
1.53
1.62
1.65
1.71
1.75
1.75
1.74
1.88
1.89
2.09
2.12
2.02
1.96
2.13
2.10
2.28
2.26
2.37
2.36
2.44
2.44
2.41
2.32
2.65
2.61
2.50
2.41
2.89
2.86
2.81
2.76
2.70
2.54
3.10
3.04
3.06
2.99
3.23
3.17
3.07
2.87
3.17
2.96
3.61
3.41
3.73
3.39
3.82
3.47
4.16
3.62
4.16
3.62
4.06
3.39
4.76
3.97
5.23
4.62
5.26
4.56
5.37
4.59
4.99
3.99
5.54
4.78
5.78
4.96
5.18
4.06
5.79
4.24
5.81
4.25
6.00
4.48
6.31
4.84
6.35
4.32

Convexity
0.00
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.02
0.02
0.02
0.02
0.02
0.03
0.03
0.03
0.03
0.04
0.04
0.04
0.05
0.05
0.06
0.06
0.07
0.06
0.08
0.08
0.07
0.09
0.09
0.10
0.09
0.09
0.13
0.13
0.13
0.15
0.15
0.15
0.20
0.26
0.26
0.27
0.21
0.29
0.31
0.23
0.26
0.28
0.31
0.34
0.31

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Top 32 counters by market capitalization
Company
Sector
Safaricom
Telecom
EA Breweries
Breweries
Bamburi Cement
Cement
Barclays Bank
Banking
Equity Bank
Banking
KCB Bank
Banking
Stanchart Bank
Banking
Co-operative Bank
Banking
KenGen
Power
British American TobaccoTobacco
Nation Media
Media
CFC Stanbic Bank
Banking
Kenya Airways
Airlines
Diamond Trust Bank
Banking
Kenya Power & Lighting Power
Mumias Sugar
Sugar
Athi River Mining
Cement
NIC Bank
Banking
KenolKobil
Oil
EA Portland Cement
Cement
National Bank of Kenya Banking
Kenya Re
Insurance
Centum Investments
Finance
Jubilee Insurance
Insurance
Total Oil
Oil
CMC Motors
Motors
TPSEA Serena Hotels Tourism
AccessKenya Group
IT
EA Cables
Manufac.
Scangroup Advertising
Media
Housing Finance
Banking
Carbacid
Gases

Year
End
Mar
Jun
Dec
Dec
Dec
Dec
Dec
Dec
Jun
Dec
Dec
Dec
Mar
Dec
Jun
Jun
Dec
Dec
Dec
Jun
Dec
Dec
Mar
Dec
Dec
Sept
Dec
Dec
Dec
Dec
Dec
July

12M
High
4.05
151
185
58
19
24
179
10.35
18
182
145
84
30
77
169
8.20
103
50
87
90
46
14
19
136
35
18
65
26
31
29
20
283

12m
Low
2.55
98
110
36
12
15
129
6.05
10
128
113
46
17
45
100
3.45
60
29
30
69
28
8
9
84
28
9
26
14
15
16
13
137

Price
4.00
142
165
44
14
20
147
8.60
11
180
124
51
25
70
142
6.80
99
29
49
80
33
10
11
106
29
10
41
20
20
25
15
283

Mkt cap
YTD % (USD)
EPS
DPS
NAV
11.1
2,133
0.27
0.10
1.34
-1.4
1,497
9.55
8.05 26.08
0.0
799 12.51
3.70 47.52
-13.9
788
4.23
2.00 16.05
-17.9
713
1.05
0.30
6.06
-15.1
590
1.77
1.00 10.01
-8.1
533 16.14 10.00 48.11
-18.9
417
0.71
0.10
4.05
-32.8
312
0.94
0.50 30.62
37.4
240 17.69 17.00 45.02
-13.9
236
9.03
5.50 30.35
-15.0
186
3.17
0.28 70.18
-13.2
152 (8.58)
1.00 41.98
1.5
151
6.60
1.40 37.89
4.4
150 40.76
8.00 318.19
0.7
139
1.05
0.40
6.56
8.8
130
5.37
1.17 24.47
-33.9
125
3.38
0.65 18.14
-25.4
97
1.58
8.59 65.95
0.6
96 20.38
1.30 67.94
-23.8
87
6.60
- 29.30
-20.8
81
2.52
0.50 14.56
-41.9
80
0.57
- 14.69
-13.8
80 14.18
4.25 53.13
-10.9
67
0.42
2.50 26.37
-37.2
65
1.41
0.45
9.14
-22.4
58
2.54
1.25 36.98
-4.1
55
0.90
0.40
5.34
-25.5
53
2.06
1.50
5.54
-5.8
52
1.62
0.54 12.97
-25.3
44
0.82
0.30 15.98
106.6
43 22.63 10.00 94.33

Market Cap Weighted average mean, ** 3 month daily average, ***Total Daily Trading Volume

P/E
ratio
14.6
14.9
13.2
10.3
13.7
11.3
9.1
12.1
11.3
10.2
13.7
16.1
10.5
3.5
6.5
18.3
8.5
31.2
3.9
5.0
4.0
19.1
7.5
67.5
7.1
16.0
22.1
9.5
15.1
17.8
12.5

Div
yld %
2.5
5.7
2.2
4.6
2.1
5.0
6.8
1.2
4.7
9.4
4.4
0.6
4.0
2.0
5.6
5.9
1.2
2.3
17.4
1.6
5.0
4.0
8.8
4.5
3.1
2.0
7.7
2.2
2.1
3.5

P/B
Ratio
3.0
5.4
3.5
2.7
2.4
2.0
3.1
2.1
0.3
4.0
4.1
0.7
0.6
1.8
0.4
1.0
4.0
1.6
0.7
1.2
1.1
0.7
0.7
2.0
1.1
1.1
1.1
3.7
3.5
1.9
0.9
3.0

ROE
20.4
36.6
26.3
26.3
17.4
17.7
33.5
17.6
3.1
39.3
29.7
4.5
(20.4)
17.4
12.8
16.0
22.0
18.6
2.4
30.0
22.5
17.3
3.9
21.4
1.6
18.5
6.9
16.6
37.2
17.3
5.1
24.0

12.9

3.9

2.9

22.1

Daily
vol**
376,142
435,993
49,861
52,868
360,550
182,482
50,019
62,724
38,968
40,477
23,114
7,196
24,094
16,900
51,217
61,666
327,718
19,324
2,986
2,547
8,232
18,674
7,784
6,475
6,362
10,597
5,835
45,200
5,368
83,650
8,764
3,084
2,424,788

Kenya weekly commentary
Week ending 6 November 2009

KESTREL CAPITAL

Disclaimer
Note: Readers should be aware that Kestrel Capital (EA) Ltd does and seeks to do business with companies covered in its research
reports. Consequently, a conflict of interest may arise that could affect the objectivity of this report. This document should only be
considered a single factor used by investors in making their investment decisions. The reader should independently evaluate the
investment risks and is solely responsible for their investment decisions.
The opinions and information portrayed in this report may change without prior notice to investors. This publication may not be distributed to the public media or quoted or used by the public media without prior and express written consent of Kestrel Capital (EA) Ltd.
Directors, staff of Kestrel Capital (EA) Ltd and their family members, may from time to time hold shares in the company it recommends
to either buy or sell and as such the investor should determine for themselves the applicability of this recommendation.
This document does not constitute an offer, or the solicitation of an offer, for the sale or purchase of any security. Whilst every care
has been taken in preparing this document, no representation, warranty or undertaking (express or implied) is given and no responsibility or liability is accepted by Kestrel Capital or any employee of Kestrel Capital as to the accuracy of the information contained and
opinions expressed herein.

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