While the Nairobi Securities Exchange (NSE) has been characterized by a sustained rise in share prices for the past two weeks, especially on banking counters, this trend has now changed.
As markets closed on Friday, profit-taking kicked in. “Dear NSE Investors, the banking stocks train has already left the station. If you never boarded the banking stocks train during the Rate Cap Removal rumour, you will lose out trying to buy in at the public announcement stage. Let the train go; there is always another train…,” said NSE on its twitter account last week.
On November 5th, KCB Bank and Equity Bank saw price declines, down 1.5per cent (to Sh 50.25) and 4.0 per cent (to Sh 47.65) respectively. Out of the 12 listed banks, Equity Bank shares which gained by 0.21 per cent to trade at Sh 48.85 when markets closed on Friday last week. Diamond Trust Bank shares also gained 0.21 per cent to trade at Sh 120.00.
Top the list of movers was Safaricom with volumes of 5,180,600, Equity Bank (1,489,900), KCB (1,098,800) and Co-op Bank (526,600).
“There’s going to be increased volatility in banking sector stocks as different banks reviews and interpret the new interest rate environment. At the end of last week there was a lot of profit-taking and most bank stocks closed lower compared to their price levels at the beginning of the week,” said Gerald Muriuki, an analyst at Genghis Capital.
Figures indicate that Total Market Volume for the week stood at 178 million shares against a volume of 185 million shares transacted the previous week. The average daily volume stood at 24 million against last week’s 32 million with Friday having the lowest volume turnover of 10.2million shares.
The benchmark NSE All Share Index (NASI) closed Friday at 160.99, representing a week on week loss of 2.04per cent and an overall year-to-date (YTD) gain of 14.64per cent.
The NSE 25 Share Index (NSE25) closed Friday at 3957.43 points, which represented a week on week loss of 3.03 per cent and an overall year-to-date (YTD) gain of 11.43per cent.
The NSE 20 share Index (NSE20) closed at 2717.86 points; representing a loss of 0.58per cent. The Derivatives Market (NEXT) of the NSE closed the week with a total of 21 contracts valued at Sh 756,000; a drop in value from the previous week of 38 contracts valued at Sh 1.3 million.
During the week, the Kenya Shilling appreciated by 0.5per cent against the US Dollar to close at Sh102.80 from Sh 103.3 recorded in the previous week.
The appreciation was attributed to positive investor sentiment owing to the repeal of interest cap during the week. On a year to date basis, the shilling has depreciated by 0.9per cent against the US Dollar, in comparison to the 1.3per cent appreciation in 2018.
