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Kenya Commercial Falls Most in a Month From Peak: Nairobi Mover

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Feb. 14 (Bloomberg) -- Kenya Commercial Bank Ltd., the country’s biggest lender by assets, fell the most in almost a month and snapped eight days of gains after technical indicators signaled to some analysts the stock was overvalued.

KCB, as the lender is known, declined 3.9 percent to 37 shillings a share by the 3 p.m. close in the capital, Nairobi, the largest drop since Jan. 17, according to data compiled by Bloomberg. More than 4 million shares traded, more than double the three-month daily average.

The stock had risen more than 14 percent in the eight trading days through yesterday, for a rally this year of 24 percent, the sixth-best performer on the Nairobi Securities Exchange.

“KCB has been rising in anticipation of full year results,” Moses Waireri, a research analyst at Nairobi-based Genghis Capital Ltd., said in a phone interview today. “Some investors are selling because the stock is now overvalued at current prices; there is no fundamental reason why it should be trading at 38 shillings.”

KCB closed at a record of 38.5 shillings yesterday, putting its 14-day relative strength index at 90, according to data compiled by Bloomberg. A reading above 70 signals to some analysts that a security is overvalued and will probably fall. KCB’s RSI was above 70 every day since Feb. 4.

The company will announce full-year earnings on Feb. 28. Profit in the nine months through September surged 35 percent to 8.69 billion shillings ($99 million) as income from loans grew, it said Oct. 25.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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