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This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
The Rwandan subsidiary of I&M Holdings is set to go public with the Rwandese government selling its 19.8 per cent stake in an initial public offering (IPO) expected to be completed later this year. The government is expected to earn hundreds of millions of shillings in the share sale that will leave I&M’s interest in the subsidiary unchanged at 55 per cent.

Our View: I&M holdings registered a 13.4% growth in FY14 PBT to KES 8.2bn driven by 17.1% growth in Net Interest Income to KES 10.4bn. The holding structure was set up to be able to do acquisitions in the region. Capital, especially Tier 2 finance, has been raised in the banking subsidiaries and at the holding company level as well. About 85% of the company’s revenue comes from Kenya and the strategy is to reduce this dependence going forward. Backed by strong international agencies, sturdy balance sheet growth and now this new subsidiary listing will enhance investor’s confidence on the stock in the near future.


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