Kenya
Equities Market
It is that time of the month when we do a roundup of what has been transpiring in the markets. In the equities market we experienced a total volume of 422 million shares traded. Telecommunication and Banking sector were the most liquid sectors. Total number of deals executed were 26,857. Value of shares traded during the period were KES 12.999Bn.
It has been undoubtedly a tough month, the bear market run still continued.NSE Investors lost Ksh 120.26 Billion measured by market capitalisation of Ksh 2,030.91 Billion at the start of Janury against Ksh 1,927.99 Billion as at 28th.
The NSE All Share Index dropped by 5.97% during the month to close at 136.81 points. The benchmark NSE 20 Index dropped by 5.83% to close at 3,773.17 points.
Source: Bloomberg
Source: Bloomberg
Monthly Gainers
We had only 11 counters in the green as we closed the month leaving the rest at the mercies of the bear.
| Company | 4 Jan. 2016 VWAP | 29 Jan, 2016 VWAP | % Gain | Shares Traded | |
| 1. | Eveready | 2.65 | 3.05 | +15.09 | 753,800 |
| 2. | E.A Portland Cement | 46.00 | 50.00 | +8.70 | 29,600 |
| 3. | Sasini | 19.50 | 21.00 | +7.69 | 675,800 |
| 4. | Unga Group | 32.25 | 34.50 | +6.98 | 288,800 |
| 5. | Longhorn | 4.65 | 4.95 | +6.45 | 765,500 |
| 6. | Sameer Africa | 3.75 | 3.90 | +4.00 | 202,400 |
| 7. | Standard Group | 28.00 | 29.00 | +3.57 | 36,100 |
| 8. | National Bank of Kenya | 15.85 | 16.30 | +2.84 | 395,200 |
| 9. | British American Tobacco | 782.00 | 800.00 | +2.30 | 505,200 |
| 10. | Kenol Kobil | 8.85 | 9.00 | +1.69 | 5,995,000 |
| 11. | Diamond Trust Bank Kenya | 186.00 | 188.00 | +1.08 | 1,123,000 |
Source: NSE, Kenyan Wall Street
Monthly Losers
Chances are very high that a portion of every investor’s holdings in the Kenyan market are having a paper loss sign in them.
We have highlighted the top 10 losers of the month in the table below:
| Company | 4 Jan 2016 VWAP | 29 Jan 2016 VWAP | % Loss | Shares Traded | |
| 1. | Williamson Tea Kenya | 401 | 187 | -53.37 | 59,800 |
| 2. | Uchumi Supermakets | 10.65 | 7.55 | -29.11 | 5,466,900 |
| 3. | Home Afrika | 2.50 | 1.90 | -24.00 | 8,873,200 |
| 4. | Atlas Development and Support Services | 2.30 | 1.80 | -21.74 | 2,741,400 |
| 5. | Limuru Tea Kenya | 1085 | 883 | -18.62 | 1,200 |
| 6. | Kapchorua Tea | 200 | 164 | -18.62 | 18,000 |
| 7. | ARM Cement | 40.50 | 33.50 | -17.28 | 3,695,000 |
| 8. | E.A Cables | 10.60 | 9.00 | -15.09 | 224,700 |
| 9. | CIC Insurance | 6.30 | 5.40 | -14.29 | 3,533,400 |
| 10. | Olympia Capital | 4.7 | 4.05 | -13.83 | 111,200 |
Source: NSE, Kenyan Wall Street
You can also analyze the performance of the counter of your interest from our January Performance Calc.xlsx
Heavily Traded Counters
The following were the most liquid counters during the month, most of them have foreign participation thus attributing to the high volumes traded.
Here are the top 5 traded counters by volume.
| Company | Shares Traded |
| Safaricom | 118,201,900 |
| Kenya Commercial Bank | 91,863,300 |
| Equity Bank | 47,157,300 |
| Co-operative Bank of Kenya | 29,653,700 |
| KenGen | 26,642,200 |
Source: NSE, Kenyan Wall Street
52 Week Low Counters
The following counters are trading near/at their 52 week lows:
- •Kenya Commercial Bank – Price 38.50
- •The Cooperative Bank of Kenya – Price 16.50
- •I&M Holdings – Price 98.00
- •Kenya Power & Lighting Company – Price 11.50
- •ARM Cement – Price 33.00
- •CIC Insurance Group – Price 5.45
- •Liberty Kenya Holdings – Price 16.50
- •Housing Finance Company – Price 20.00
- •Total Kenya – Price 16.50
- •East African Cables – Price 9.00
- •O.C Kenya – Price 92.00
- •Car & General – Price 39.00
- •Kenya Orchards – Price 97.00
- •Olympia Capital Holdings – Price 4.05
Chart of the Month
Our chart of the month is Eveready, it is the only counter above 10% from its initial price since the beginning of the year. It gained 15% to close at an average price of KES 3.05 compared to KES 2.65 at the beginning of the period under review. 753,800 shares were traded.
Source: Financial Times
Fixed Income Market
The Debt market had a good amount of trading. Turnover for the month stood at KES 21.165Bn. 182 deals were executed during the month.
Trading was concentrated on the One Year bond FXD 2/2015/1Yr which traded bonds worth KES 9.778Bn accounting roughly 46.2% of the total turnover during the period under review.
Treasury bills subscriptions was at 138.4% compared to 137.1% in December 2015.
Major Events In Jan 2016
Dr Gachao Kiuna Resigned as CEO of TransCentury CEO
Kitili Mbithi Resigned as CEO of CFC Stanbic Holdings CEO
Maria Msiska resigned as CEO of BOC Kenya
NSE also signed up 6 banks to act as clearing members for derivatives trading
EABL released their Half Year 2016 results, posting a 67% increase in profit to Kshs 7.7 Billion, attributed to sale of its subsidiary Central Glass Industries. Excluding one off gains, net profit was up 16%.
Netflix launched in Kenya
Central Bank Of Kenya’s MPC met and retained the key lending rate at 11.5%.
Expected Results Release
Longhorn Kenya Publishers Half Year results
Uchumi Supermarkets Half Year Results
Full Year
Kenya Commercial Bank (KCB Group)Kenya Power & Lightening
KenGen Kenya
CFC Stanbic
NIC Bank
East African Cables
Pan African Insurance Co.
British American Tobbacco (BAT)
Forex Matters
The Kenyan Shilling
USDKES
The Kenyan Shilling has been trading range bound, the resilience is due to the current account deficit narrowing down due to the savings realized in this period of low commodity prices especially oil.
Source: Investing.com
General African Market Performance
*Price dates Jan 4th – Jan 28th
*Local currency performance assuming local investors positions tracked by the various all share indices.
As you can see from the sample, African Exchanges were in the negative zone with Nigeria leading the losers pack by 16.8%, followed by Egypt at 14.3% and Zimbabwe at 10.2%. Tunisia’s Exchange gained by almost 4.9% being the best performing market in the region.
Nigeria
We take a closer look at Nigeria which has been in a downward trend since March 2015, as illustrated below. The financial markets are clearly not pleased with Policy decisions in Nigeria by ignoring to devalue the Naira and keeping the benchmark interest rate unchanged at 11%. The Naira is pegged to the dollar at 197 – 199, in the black market it is trading at around the 300 level. Head of Trading of a Nigerian Bank said, “they are living in denial.”
Nigerian All Share Index
Source: Nigerian Stock Exchange
In January the Nigeria Pension Index fell by almost 12.1%. The Pension index tracks the top 40 companies in terms of market capitalization and liquidity. In fact trading volumes in Nigeria reduced drastically in 2015 due to the continuing market sell off.
Pension Index
Source: Nigerian Stock Exchange
Source: Bloomberg
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 |
| Egypt | B- Stable | B3 Stable | B Stable |
| Zambia | B Stable | B2 Stable | B Stable |
| Ghana | B- Stable | B3 Negative | B Negative |
| Botswana | A-Stable | A2 Stable | – |
| Angola | B+ Negative | Ba2 Negative | B+ Stable |
Reference Table
| 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 |
Conclusion
We thought 2016 was going to start with a bang and for sure it started with a bang but in the negative direction as it was in 2015. Globally the markets have been a tough arena including our own Kenyan market. It has been a month of large defeats and very small victories. On the bright side one should be able to see past the storm and take meaningful positions with a long term view in mind, this is the point where contrarian investing comes into play.
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.
