CFC Stanbic Holdings Ltd., the Kenyan unit of Standard Bank Group Ltd., rose to the highest level in more than two years as Old Mutual Securities Ltd. said the stock was undervalued compared with peers.
Shares in the Nairobi-based lender climbed 4.4 percent to 71 shillings, by the 3 p.m. close in Nairobi, the highest level since March 18, 2011, according to data compiled by Bloomberg. About 308,400 shares changed hands, or 60 percent of the three-month daily average.
CFC Stanbic is trading at 7.8 times earnings, while NIC Bank Ltd. has a price-to-equity ratio of 10.3 and Diamond Trust Banking Ltd. a multiple of 9.4, according to data compiled by Bloomberg. Diamond Trust Bank, which has units in Uganda, Tanzania and Burundi, declined 0.6 percent. NIC rose 0.9 percent to boost its advance this year to 49 percent this year.
“There appears to be good appetite for the banking stock which is relatively attractive in terms of valuation compared to its industry peers,” Nairobi-based Old Mutual Securities said of CFC today in an e-mailed note to clients.
First-quarter net income jumped 78 percent as CFC, Kenya’s sixth-largest, boosted loans, the lender said on May 21. Standard Bank, based in Johannesburg, is Africa’s largest bank by assets.
CFC’s shares have gained 69 percent this year, compared with a 33 percent increase in the 61-member Nairobi All Share Index. The lender’s 14-day relative strength index rose to 75, above the 70 level that signals to some analysts that a security is overvalued for the second day.