Nov. 26 (Bloomberg) -- NIC Bank Ltd., the best-performing stock among Kenyan lenders this year, climbed to the highest in almost five years on bets the shares are undervalued and that the company’s expansion plan will boost profitability.
Shares in the Nairobi-based lender advanced 1.9 percent to 40.75 shillings by the close, the fifth day of gains and the highest level since December 2007. About 1.14 million shares traded, more than 10 times the three-month daily average, according to data compiled by Bloomberg.
“It is still attractive to most investors and the reason is because the investors feel it is not overvalued,” Ted Macharia, a research analyst at Nairobi-based AIB Capital Ltd., said by phone today. “We have a valuation of 49 shillings, others have it higher. Investors are trading on the bank’s strong quarter-three earnings and expansion plan.”
Net income in the nine months through September climbed to 2.4 billion shillings ($28 million) from 1.77 billion shillings a year earlier, NIC said on Nov. 22. Net interest income, the money banks make from loans, grew 34 percent to 3.99 billion shillings.
NIC, which raised 2 billion shillings through a rights offer last month, will add eight outlets over the next 12 months and start operations in eastern and central Africa.
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