Bottom Line: Wave 2 correction maturing — Wave 3 extension toward 18.00 targets set to begin
HFCK — Mortgage Demand Recovers as Wave 3 Advance Takes Shape
HF Group (HFCK) operates as Kenya’s only dedicated mortgage finance institution, giving it a structurally unique position within the Nairobi Securities Exchange financial sector. Kenya’s housing deficit, estimated at over two million units and widening annually, provides a durable long-term demand backdrop that few lenders can directly exploit the way HFCK can. The Central Bank of Kenya’s gradual monetary easing cycle, which has seen the benchmark rate trimmed from its 2024 highs, is beginning to ease the cost-of-credit environment that had weighed heavily on mortgage uptake across the market. Lower lending rates directly improve HFCK’s loan origination volumes and reduce non-performing loan pressure on the existing book, both of which are critical earnings drivers for the institution. The government’s Affordable Housing Programme continues to accelerate, with HFCK positioned as a natural financing partner for qualifying developers and off-takers seeking structured mortgage products. Net interest margins had been under compression during the high-rate environment, but the improving rate cycle should allow the bank to rebuild spreads as it reprices new disbursements. Valuation remains undemanding relative to book value, and any earnings upgrade cycle driven by volume recovery and margin expansion could attract renewed institutional interest in a stock that has historically been thinly followed.
Chart Update — Daily and 1 Day
On the 16-hour chart, HFCK has completed a clear five-wave impulse from the 2023 lows into the Wave 1 peak near the 16.00 level, with the subsequent decline now interpreted as a Wave 2 correction pulling back in a corrective zigzag structure toward the 13.50–14.00 area. The 4-day chart confirms the broader degree count, with a larger cycle Wave I and Wave II base already established at multi-year lows, and the current advance forming Wave III of a higher-degree impulsive sequence. Wave 2 at the current degree is expected to find support well above the prior Wave 1 origin, consistent with Elliott Wave rules, and the corrective structure appears to be maturing rather than deepening. Once Wave 2 completes, the projected Wave 3 extension targets the 18.00 area and potentially beyond, as third waves within this sector tend to carry the most momentum and volume expansion. The near-term risk is a slightly deeper Wave 2 retracement toward 13.20, but the bullish count remains intact provided price does not close below the Wave 1 high on the larger degree chart.
Bottom Line: Wave 2 correction maturing — Wave 3 extension toward 18.00 targets set to begin
