Diamond Trust announced improved retained profits for 2006 on the back of a growing balance sheet. PBT was up 65% and from my pt of view the most pleasing aspect of this is that it was mainly from higher interest income on lending while NPA charge fell. Going fwd, DTK plans to open more branches and I believe a merger with Habib Bank is already in the cards if not effected already. This will make it the 9th largest bank-based on Bankele's latest banking review with a substantial market share within the Asian retail and business community. DTK is also expanding its reach to the rest of EA region.
Now to the share price, this fell yesterday when the results were announced to the market as have done all other shares-except funnily enough the loss-making Sameer Africa which rallied after the initial shock fall. There are two theories why this is happening. Speculators who piled into any share without checking the fundamentals on the "this shareprice will do well because of ...fill free to fill-in" train. The prices then went off the scale with silly P/E ratios being generated. Once the results came in, the speculators discovered they had been suckered and are now selling off. The second theory is simply guys profit-taking and cashing out for 2007 while they wait for the election year to run its course.
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