Weekly Market Report; Foreign Investors Spotted pulling out Of Barclays

Weekly Report

KENYAN MARKET

The Week in Numbers

Equity Market

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Valuations improved this week with an increase in the market cap by KES 64.459Bn. The benchmark NSE 20 index managed to close the week at 3,833.07 points, higher by 1.59% compared to the previous week. Below is a 1 month chart of the NSE 20 Index.

NSE 20 1 month chart.JPG

Source: Bloomberg

Performance of the NSE 20 Share Index since 1998

We maxed out NSE 20 share Index performance since 1998 and as you can see,the current dips were last spotted in;

-Mid 2012

-Mid 2011

-Early 2010

-The second quarter of 2008

-Early2005

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Average Sector P/E

Sector P/E
Agriculture 16.15
Automobiles & Accessories -13.61
Banking 7.51
Commercial & Services -3.17
Construction & Allied 6.90
Energy & Petroleum 3.87
Insurance 8.01
Investment 7.50
Investment Services 11.03
Manufacturing & Allied 30.05
Telecommunication & Technology 20.25

Source: NSE

Top Movers (Turnover)

Counter Price Turnover (USD) Millions
KCB 40.00 9.9
SAFARICOM 16.20 6.7
EABL 273.00 5.2
EQUITY GROUP 39.00 3.8
ARM CEMENT 33.00 1.2

Source: NSE, Kenyan Wall Street

At Ksh 1.2 Billion, net foreign inflows recorded were the highest in four and a half months.

Foreign investors were net buyers in KCB and EABL. EABL announced its Half Year results in the previous week and our guess is that foreign investors would wish to lock in on the KES 2.00 dividend declared which is an increase of 33% compared to a similar period the previous year.

Foreign investors were net sellers in Barclays Bank of Kenya. According to a research note by Bernstein cited in Bloomberg, it is resonated clearly that Barclays Plc the parent company should do away with Barclays Africa Group. It is mentioned that “the Africa business has absolutely no synergy whatsoever with the rest of the bank.” In the note it was asked ‘where should Barclays be in 2020?’ They answer by saying, ‘A pure-play U.K retail and commercial franchise with the best technology platform in Europe, with Africa gone and the U.S. investment bank carved out.” Barclays Africa owns 68.5% of Barclays Bank of Kenya, from what it seems there is external pressure for Barclays to do something about their subsidiaries in Africa.Also note that Barclays Kenya is the second biggest Barclays Africa subsdiary in terms of customer numbers.

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We will keenly monitor the situation as events unfold.

Top Movers (Volume)

Counter Shares Traded
SAFARICOM 42,216,900
KCB 26,162,400
EQUITY 9,806,700
BARCLAYS BANK 4,813,100
ARM CEMENT 3,804,600

Source: NSE, Kenyan Wall Street

Safaricom Limited traded 42 million shares during the week making it the most liquid counter in the week. We extracted a 1 year Safaricom chart. Safaricom has been volatile, question is can you ride the volatility?

safaricom.JPG

Source: Financial Times

Gainers

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Losers

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Fixed Income Market

Turnover in the debt market reduced by 34.7% to stand at KES 4.023Bn however, number of deals increased from 74 the previous week to stand at 120 deals this week.

Notable high volume trades were on the IFB 1/2015/9Yr with a total value of KES 976.45Mn. 20 deals were executed in the week. Average traded yield was 14.1551%.

T-Bills

From the Table below, we can see that the Average interest rate for the 364-Day T-Bill fell for the second week in a row.

364-Day Screen shot 2016-02-08 at 3.14.26 AM.png

182-Day T-Bill

While the average interest rate for the 182-Day T-Bill fell for the first time in 2016Screen shot 2016-02-08 at 3.14.01 AM.png

The current yield curve is somewhat inverted which presents some interesting opportunities. Have a look at the official NSE Yield Curve below:

nse yield curve.JPG

Source: NSE

Currencies

The Kenya Shilling has been steady hovering around the 102 level to the dollar.

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Source Investing.com

Market News

NSE Top Investor Joel Kibe, kills guard in accident

Kenya’s Most Promising Stocks of 2016

Kenya Police Launch Manhunt for Uber taxi attackers

NSE to introduce platform for trading in carbon credits

World Bank to release annual report at IHub

Foreign Investors Emerge Net Buyers in January

 

Disclaimer: The contents of this website have been prepared to provide you with general information only. In preparing the information, we have not taken into account your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed.