Co-op Bank shares soar after interest caps scrapping

A summary of the ratings by Renaissance Capital. [Photo Courtesy]

Shares of Co-operative Bank, Equity and KCB are projected to surge significantly from current levels, according to the latest Equity Research Report by Renaissance Capital.

The report further projects that shares of Co-operative Bank will record the highest jump with an Upside Potential of 36.1 per cent to achieve a Target Price of sh21.40 from sh14.30, followed by Equity Bank stocks expected to hit Sh58.30 from Sh44.20, a rise of 21.4 per cent KCB shares are projected to rise to Sh56.50 from the current Sh45.70, representing an Upside Potential of 17.6 per cent. Banking stocks are enjoying a solid market rally barely a day after MPs voted to scrap rate caps.

The upsurge comes barely a day after the National Assembly faced a quorum hitch to overturn President Uhuru Kenyatta’s decision to repeal the cap on interest rates.

Only 160 MPs out of the required 233 were present.

As a consequence, Parliament Speaker Justin Muturi accented President Uhuru’s reservations on the Finance Bill, 2019 which will now move forward for signing, most likely this week.

Central Bank of Kenya, World Bank and International Monetary Fund were against scrapping off the rate cap.

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Kenyans with existing loans, however, are likely to make their payments at the previous interest rates after a recommendation from the National Assembly Finance Committee.

The house committee also recommended shielding of legacy loans from immediate re-pricing which was okayed by the Speaker, saying that it fully accommodated the president’s desires.

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Cooperative BankEquity BankKenya Commercial BankInterest rates capFinancial billPresident Uhuru