Stock Market
It has been a tough year at the bourse in 2015 amidst a tough operating environment. We have tried demonstrating this using the various indices below.
NSE All Share Index
The NSE All Share Index began 2015 at 163.25 points and has dropped to close at 143.97 points as at 29th December, this represents an 11.8% drop.
NSE 20 Share Index
The Benchmark NSE 20 Share Index began 2015 at 5,091.60 points and has closed at 4,004.91 points as at 29th December. This represents a decline of about 21.3%.
FYI: The NSE 20 Share Index is a price weight index calculated as a mean of the shares of 20 public, listed companies. They are selected based on a weighted market performance during the period under review based on the following criteria:
- Trading activity measures i.e. market capitalization, shares traded, deals/liquidity and turnover during the period under review are weighed in the ratio of 4:3:2:1 respectively.
- A company must have a free float of at least 20%
- Must have a minimum market capitalization of KES 20 Million
- A company should ideally be a blue chip with superior profitability and dividend record.
NSE 20 Share Index constituent companies are as follows:
- Sasini Limited
- Kenya Airways
- Nation Media Group
- Scangroup
- Centum Investment Company
- Kenya Commercial Bank
- The Cooperative Bank of Kenya
- Standard Chartered Bank
- Barclays Bank of Kenya
- Equity Bank (Group)
- CFC Stanbic Holdings
- East African Breweries Limited
- British American Tobacco Kenya
- Athi River Mining (ARM Cement)
- Bamburi Cement
- KenolKobil
- Kenya Power
- Kenya Electricity Generating Company
- British-American Investments Company
- Safaricom Limited
Gainers of the Year 2015
2015 has been a challenging year, however, there have been counters which have been resilient in this tough times as shown below. It has been a big year for Agricultural stocks.
| Company | 31 Dec. 2014 Price | 29 Dec. 2015 Price | % Gain | Shares Traded | |
| 1. | Kakuzi | 180.00 | 340.00 | +88.89 | 649,600 |
| 2. | Sasini | 12.85 | 21.38 | +66.34 | 8,035,300 |
| 3. | Williamson Tea Kenya | 248.00 | 399.50 | +61.09 | 328,300 |
| 4. | Limuru Tea Company | 771.00 | 1,085.00 | +40.73 | 12,000 |
| 5. | Marshalls (E.A) | 9.80 | 13.20 | +34.69 | 216,700 |
| 6. | Bamburi Cement | 139.00 | 176.00 | +26.62 | 13,161,500 |
| 7. | Kapchorua Tea | 137.00 | 172.00 | +25.55 | 99,500 |
| 8. | Kenya Re-Insurance | 17.05 | 21.00 | +23.17 | 79,785,300 |
| 9. | Nairobi Securities Exchange | 20.50 | 24.63 | +20.12 | 82,576,600 |
| 10. | Safaricom Limited | 14.05 | 15.98 | +13.70 | 2,422,522,500 |
| 11. | Umeme | 21.00 | 22.00 | +4.76 | 39,385,300 |
| 12. | KenolKobil | 8.70 | 8.78 | +0.86 | 221,106,300 |
Notable Local Investors in the Green
- John Kibunga – Estimated paper gain in Kakuzi KES 859.6 Million
- Wanjui Joe – Estimated paper gain in Kakuzi KES 54.1 Million
- Gulamali Ismail – Estimated paper gain in Sasini KES 165.9 Million
- Karim Jamal – Estimated paper gain in Sasini KES 39.1 Million
- Satchu Aly Khan – Estimated paper gain in Sasini KES 10.5 Million
- Hassan Popat –Estimated paper gain in Limuru Tea KES 50.7 Million
- Gulamali Ismail – Estimated paper gain in Limuru Tea KES 48.3 Million
- Patelamarjeet Baloobhai Patel & Baloobhai Chhotabhai – Estimated paper gain in Bamburi KES 185 Million
- Patelamarjeet Baloobha Patel; Baloobhai – Estimated paper gain in Bamburi KES 37 Million
- Satchu Aly Khan – Estimated paper gain in Kapchorua Tea KES 2.2 Million
- Minesh Mulchand Shah – Estimated paper gain in Kapchorua Tea KES 1.5 Million
- Paul Wanderi Ndungu – Estimated paper gain in Kenya Re KES 9.2 Million
- Jackline Gathoni Gitaka – Estimated paper gain in Kenya Re KES 8.9 Million
- John Kibunga – Estimated paper gain in Safaricom KES 21.2 Million
Losers of the Year 2015
As we have mentioned before 2015 has been a very challenging year this has been reinforced with 15 companies issuing profit warnings expecting profits to be lower than 2014. The year has been generally bearish with a staggering 48 listed companies ending the year in the red zone.
Profit Warning Checklist (Listed Companies)
- BOC Gases
- ARM Cement
- Standard Chartered
- Uchumi Supermarkets
- Mumias Sugar
- Express Kenya
- E.A. Cables
- Standard Group
- Atlas Development and Support Services
- Sameer Africa
- Car & General
- Crown Paints
- BRITAM
- TPS Serena
- Pan Africa Insurance
Top 20 2015 losers are shown in the table below:
| Company | 31 Dec 2014 Price | 29 Dec 2015 Price | % Loss | Shares Traded | |
| 1. | Atlas (ADSS) | 12.05 | 2.00 | – 83.40 | 2,416,400 |
| 2. | Trans-Century | 19.35 | 7.63 | – 60.59 | 7,480,000 |
| 3. | BRITAM | 29.75 | 13.40 | – 54.96 | 119,128,300 |
| 4. | Longhorn Publishers | 9.25 | 4.20 | – 54.59 | 11,822,500 |
| 5. | ARM Cement | 86.00 | 40.50 | – 52.91 | 38,257,400 |
| 6. | Housing Finance | 45.75 | 21.75 | – 52.46 | 60,629,700 |
| 7. | Pan Africa Insurance | 120.00 | 61.50 | – 48.75 | 2,163,800 |
| 8. | Home Afrika | 4.10 | 2.20 | – 46.34 | 73,548,900 |
| 9. | Kenya Airways | 8.70 | 4.93 | – 43.39 | 100,334,100 |
| 10. | National Bank of Kenya | 24.75 | 14.38 | – 41.92 | 6,707,100 |
| 11. | Eaagads | 42.00 | 24.50 | – 41.67 | 2,866,800 |
| 12. | Crown Paints | 111.00 | 65.00 | – 41.44 | 2,386,700 |
| 13. | Standard Chartered | 335.00 | 202.50 | – 39.55 | 4,826,600 |
| 14. | Sameer Africa | 6.00 | 3.70 | – 38.33 | 7,936,500 |
| 15. | E.A Cables | 16.20 | 10.20 | – 37.04 | 9,329,800 |
| 16. | CFC Stanbic Holdings | 124.00 | 80.00 | – 35.48 | 22,478,000 |
| 17. | KenGen | 10.30 | 6.65 | – 35.44 | 100,734,500 |
| 18. | Express | 6.20 | 4.05 | – 34.68 | 1,825,200 |
| 19. | CIC Insurance | 9.60 | 6.35 | – 33.85 | 96,373,400 |
| 20. | Nation Media Group | 263.00 | 174.50 | – 33.65 | 7,327,500 |
Heavily Traded Counters
| Company | Shares Traded (31 Dec 2014 – 29 Dec 2015) |
| Safaricom | 2,422,522,500 |
| Equity Group | 1,040,568,600 |
| Kenya Commercial Bank | 562,125,800 |
| Mumias Sugar | 347,684,000 |
| Co-operative Bank | 243,103,800 |
| KenolKobil | 221,106,300 |
| Barclays Bank | 167,863,200 |
| Kenya Power | 128,165,600 |
| British-American Investments Company | 119,128,300 |
| Centum Investments | 117,835,500 |
Fixed Income
Bond Market Performance Indicators 2010 – 2015
We have also noticed trading during the year has been on short term bonds which have offered attractive interest rates. Long term papers have been shied off by investors and their subscription rates tell the story.
Corporate bond turnover is still relatively low and investors prefer holding them to maturity.
Market Gender Equality
Males still dominate the market in terms of participation. We think it’s high time that the numbers change and the various market participants should look at an avenue in tapping the female gender in order to enhance financial inclusivity and bring more liquidity in the market.
Forex Matters
The Shilling
The Kenyan Shilling depreciated further in 2015 on the back of a strong resilient dollar. The Shilling has depreciated around 13.2%. Emerging and Frontier markets have been on the receiving end of the dollar and almost all African currencies have depreciated against the greenback.
Economic Highlights
GDP Growth Quarterly
Estimates of GDP show that Kenya’s economy expanded by 5.8% compared to 5.2% recorded in a similar quarter in 2014. Growth was supported by strong expansions in Agriculture, Construction, Financial and Insurance, Wholesale and Retail Trade and Transport and Storage.
Construction Industry grew by 14.1%, Mining and Quarrying by 12.5%, Electricity and Supply by 11.0% and Financial and Insurance sector by 10.1%
Credit Ratings
| Country | S&P | Moody’s | Fitch |
| Kenya | B+ Negative | B1 Stable | B+ Negative |
| Uganda | B Stable | B1 Negative | B+ Stable |
| Rwanda | B+ Stable | – | B+ Stable |
| Ethiopia | B Stable | B1 Stable | B Stable |
| Nigeria | B+ Stable | Ba3 Stable | BB- Negative |
| South Africa | BBB- Negative | Baa2 Negative | BBB- Stable |
Ever wondered what this ratings represent? We have summarized a reference table which will provide more insights on the meaning of this ratings.
| S&P | Moody’s | Fitch | Description |
| AAA | Aaa | AAA | Prime |
| AA+ | Aa1 | AA+ | High Grade |
| AA | Aa2 | AA | |
| AA- | Aa3 | AA- | |
| A+ | A1 | A+ | Upper Medium Grade |
| A | A2 | A | |
| A- | A3 | A- | |
| BBB+ | Baa1 | BBB+ | Lower Medium Grade |
| BBB | Baa2 | BBB | |
| BBB- | Baa3 | BBB- | |
| BB+ | Ba1 | BB+ | Non-Investment Grade Speculative |
| BB | Ba2 | BB | |
| BB- | Ba3 | BB- | |
| B+ | B1 | B+ | Highly Speculative |
| B | B2 | B | |
| B- | B3 | B- | |
| CCC+ | Caa1 | CCC | Substantial Risks |
| CCC | Caa2 | – | Extremely Speculative |
| CCC- | Caa3 | – | In default with little prospect for recovery |
| CC | Ca | – | |
| C | C | – | |
| D | / | DDD | In Default |
| – | / | DD | |
| – | – | D |
Interest Rates
CBK’s benchmark interest rate was raised in June to 10% from the previous 8.5%. A month later in July it was raised further to 11.5% and has been held at that position throughout the year.
We managed to obtain data of the various rates and compiled them in the table for the 10 months to October.
| Month | Repo | Reverse Repo | Interbank | 91-Day T-Bill | 182-Day T-Bill | 364-Days T-Bill | Cash Reserve Requir. | CBK Rate |
| Jan | 8.08 | – | 7.12 | 8.59 | 10.19 | 10.73 | 5.25 | 8.5 |
| Feb | 7.87 | – | 6.77 | 8.59 | 10.37 | 10.96 | 5.25 | 8.5 |
| Mar | 8.08 | – | 6.85 | 8.49 | 10.35 | 10.69 | 5.25 | 8.5 |
| Apr | 8.38 | – | 8.77 | 8.42 | 10.26 | 10.57 | 5.25 | 8.5 |
| May | 8.5 | – | 11.17 | 8.26 | 10.37 | 10.71 | 5.25 | 8.5 |
| Jun | 9.7 | – | 11.78 | 8.26 | 10.55 | 10.98 | 5.25 | 10 |
| Jul | 9.43 | – | 13.48 | 10.57 | 11.99 | 11.93 | 5.25 | 11.5 |
| Aug | 11.5 | – | 18.49 | 11.54 | 12.06 | 13.3 | 5.25 | 11.5 |
| Sep | 11.5 | – | 19.85 | 14.61 | 13.4 | 15.24 | 5.25 | 11.5 |
| Oct | 11.5 | 18.12 | 14.82 | 21.65 | 21.52 | 21.61 | 5.25 | 11.5 |
Inflation Rate
| Month | Inflation (Month on Month) % | Inflation (annual Average)% |
| Jan | 5.53 | 6.74 |
| Feb | 5.61 | 6.63 |
| Mar | 6.31 | 6.63 |
| Apr | 7.08 | 6.69 |
| May | 6.87 | 6.65 |
| Jun | 7.03 | 6.63 |
| July | 6.62 | 6.54 |
| Aug | 5.84 | 6.34 |
| Sep | 5.97 | 6.29 |
| Oct | 6.72 | 6.31 |
| Nov | 7.32 | 6.42 |
| Dec | 8.01 | – |
Conclusion
The NSE 20 Benchmark Index is trading at around the 4000 level, prices have been depressed and it is our view that pockets of value can be sought.
On the shilling, it is the general feeling that the new CBK governor has been able to stabilize it, some analysts forecast that the shilling might go down to double digits. Our view, however, is still a prudent one and one should maintain dollar denominated assets especially cash.
Our team here at Kenyan Wall Street wishes all our readers a prosperous Happy New Year and greatly appreciate your support.
Sources: (KBNS, CBK, CMA, NSE, Bloomberg, Investing.com, TradingEconomics, Kenyan WallStreet, CDSC, Company Filings)
