Housing Finance of Kenya Climbs to 17-Month High: Nairobi Mover

Housing Finance Ltd., Kenya’s only publicly traded mortgage lender, jumped to the highest in more than 17 months on bets earnings in the year to December grew.

Shares climbed 2.8 percent to 18.40 shillings by the 3 p.m. close in Nairobi, the highest level since Aug. 23, 2011. About 80,000 shares traded, 68 percent of the three-month daily average, according to data compiled by Bloomberg.

“It is generally driven by expectations of earnings,” Faith Atiti, a research analyst at Nairobi-based NIC Securities Ltd., said by telephone. “There was a slight decline in earnings in quarter three due to an increase in interest expense, which should moderate in the fourth quarter and we expect profit after tax to grow about 10 percent.”

A 1.7 billion-shilling ($19.4 million) loan the company signed with the International Finance Corp. yesterday will enable Housing Finance to give borrowers cheaper loans, while demand for houses remains high, she said.

Earnings in the nine months through September fell 2.7 percent to 396 million shillings after the cost of credit rose.

Housing Finance, which is expected to announce earnings later this month, was rated a buy in new coverage by Nairobi-based AIB Capital on Jan. 15, with a price target of 26.69 shillings. Growth in loans, efficiency created by agency banking and higher revenue from property development are expected to boost the share, according to AIB.