Happy March! In the week that Spotify finally launched in Kenya and everyone is now on and on about "You had to be there" throwback tweets, let's look at the latest in crypto and stocks.
Bitcoin back to $40Ks
Bitcoin dropped quite a bit last week (15%), going back to 46K as we write this. For everyone who has been up for the ride for years, it was not a shock. In fact, we were all holding our breath waiting for it because we are used to it. HODL. We suggested not buying last week, now we think it's not a bad time to buy. Or you could even wait longer and see if it drops further. same with Ethereum which dropped 22%! Let's meet again next week.
A look at Cardano
The coin that did catch us by surprise is Cardano. No one seems to know why it is the only coin that broke the crashing pattern to displace Binance Coin at number three on the table. It's not like Elon is tweeting about it. Lol. Some are attributing the rise to its DeFi* connections and the fact that Ethereum gas fees* have become too much.
*gas fees - the miner fees required to successfully confirm a transaction on the Ethereum blockchain
*DeFi - Decentralized Finance. The buzzword that has been making the rounds in the industry. It refers to the financial applications that are focused on smart contracts on blockchains as opposed to a central bank.
Our stocks recommendations
Below are some trading ideas and stock picks highly recommended:
Safaricom Plc – Long Term Buy – We maintain a Buy recommendation on the communication company on further foreign interest on the stock. Book closure for the interim dividend payment of KES 0.45 per share is set for Friday March 5th,2021 with payment on or before Wednesday March 31st, 2021. The firm has gained 14.1% on y-t-d basis.
Total Kenya - Buy – We fathom an upward trend on the petroleum company stock with an expected positive FY-2020 result. The energy firm posted a 2.5% increase in profits after tax with net margins improving to 3.6% from 107% in 2019. With the reopening of H2-2020, we expect revenue recovery which will push for better margins on lower operating expenses. We expect the company to maintain a dividend payment which will boost stock value. the stock value has increased by 4.2% y-t-d levels.
EABL – Short Term Sell – The stock has eased on the HY1-2021 half year announcement momentum. A turnaround in foreign investment interest to a net sale will suppress the counter value with a 2.3% dip w-w. For investors who bought on before the H1-21 result release, we advise a SELL for profit taking with the market ease on the pricing of the results. We retain a long term Buy at a valuation of KES 203.61 on the stock pegged on positive performance on H2-21.