January 2016 Market Report;NSE Investors wealth fell by Ksh 120 Billion

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.

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:

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.

Source: NSE, Kenyan Wall Street

52 Week Low Counters

The following counters are trading near/at their 52 week lows:

1. •Kenya Commercial Bank – Price 38.50
2. •The Cooperative Bank of Kenya – Price 16.50
3. •I&M Holdings – Price 98.00
4. •Kenya Power & Lighting Company – Price 11.50
5. •ARM Cement – Price 33.00
6. •CIC Insurance Group – Price 5.45
7. •Liberty Kenya Holdings – Price 16.50
8. •Housing Finance Company – Price 20.00
9. •Total Kenya – Price 16.50
10. •East African Cables – Price 9.00
11. •O.C Kenya – Price 92.00
12. •Car & General – Price 39.00
13. •Kenya Orchards – Price 97.00
14. •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 4^th – Jan 28^th

*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

Reference Table

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.