The NSE Week 19 in Review: Performance and future expectations

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The Nairobi Securities Exchange saw low activity in week 19 of trading with a general reduction in the market turnover. As of the closing day Friday, the Market capitalization from the Nairobi bourse stood at 2.15 billion from a total of 15.5 million shares traded. In plus was the total All-Share Index, which dropped from the highs of the week’s opening to close off at 140.87 points.

The figures represent a significant drop with the All-Share index bearing the brunt of the uncertain economic times.

In particular, the start of the week saw the bourse All-Share Index start at 143.42 points with a volume of 28 million shares on record. Mid-week the rise on the All-Share index would continue with highs of 148 on the NSE All-Share index. But the week’s closing would see a downturn with a value drop of 1.35% from its previous day of 142.80. A one-point drop to standing at 140.87 at the end Friday.

NSE Stock Summary 8/05/2020

Considering the week’s performance, this was also a drop from opening day Monday. At 143.42 points, the bourse’s ALL-Share Index rode on a positive value of 2.67%.

Closing on the red; NSE losers Week 19

Much of the week’s focus ended in uncertainty over media stocks with the use of open digital platforms now thriving. The competition from new technologies has seen the media stocks continue to dwindle throughout the week, unassuming to investors.

Standard Group saw a significant drop within the week running a downward turn of -10% on its share price to trade in at Ks 18 per piece. While slightly losing also, the Nation Media Group would further shed 0.94% of its share value. Quite significant considering the media giant share loss now totals to -13.67% for the past one month.

However, the week’s most significant loss in double-digits would go to home and construction retailer, Olympia Capital Holdings Limited. The investment company’s shares as the week’s biggest losers with a drop of 13.79% as of closing Friday. That is despite recording negligible trading within a low -activity week.

Following the economic headwinds is Tyre manufacturing, Sameer Africa Limited, which also stood at double digits in value losses to stand at Kes 2.10 per share. This is no surprise considering past news from the Tyre maker of the closing-up shop.

The agricultural sector also saw significant features in the week’s biggest losers. Closing day Friday would have Eaagads Ltd come in second on the list of shares in the red. The coffee processor had hit a loss value of -10% on its share price of KES 9.00. According to the weekly data, this stands as the week’s second-largest value loss coming in at 10.97%. On average, this puts Eaagads Ltd share price loss at 4.5% daily for the week.

Also, Limuru Tea Co Ltd made up the blue-chip agricultural shares with the week’s most substantial losses. As one of the leading share price value, the tea processor hit a rock-bottom loss of 6.43% to further trade at lows of Kes 400 per share. That comes as the aftermath of the Covid19 pandemic which sees much of the firm’s exports halted.

NSE NASI Index 8/05/2020

NSE defies odds to record gains

Despite the economic headwinds, blue-chip shares continue to resist and gain from recent days. Much of it lies comes amid plans of economic re-open to undermine further financial impact. 

In particular, midweek would see the NSE turnover stock value stand at Sh 2.265 trillion. In comparison to April, the data would reveal the NSE had garnered over sh264.5 billion in value over the past month. The cost accounts for stock market recovery, which offers the chance to cut the Coronavirus related losses.

As it stood, the NSE biggest week gainer was National carrier, Kenya Airways. The airline was on closing day the week’s top gainer with +42.70% on its share value. This would see the carrier’s share price hit highs of Sh1.33 per share during the week.

The decisive run was also present with Uchumi Ltd, with the retailer taking the second top gainer spot. As per the All-Share Components, the daily change fro its share price stood at a positive change of 10.71% in each day.

CMA seeks to embrace digital platforms

In a move seen to fight the effects of the current Covid-19 pandemic, the Capital Markets Authority has set up measures for transactions. The regulatory body during the week put up proposals for all NSE market participants to follow in terms of operations.

According to the release, the CMA’s Soundness report intends to transform capital markets transactions and include mobile platforms. The idea lies in leveraging e-mobile platforms to handle client transactions through mobile handsets. This would have clients on-board, trade and transact shares and cash through their devices.

The CMA report further suggests that companies explore the possibility of using viable Electronic Annual General Meetings for the companies. The authority’s understanding of merging technologies already has capital market players experience the concept in the CMA sandbox. Already, ScanGroup took the novel approach to have a virtual AGM of its shareholders after a court intervention allows it to go through.

Dividend season

The reports of market share gains come midst interest by foreign investors on the daily trades. Already foreign players make up 70 percent of the day’s business, with net selling also becoming their roles in late March and April. Notably, this interest is not without reason.

Much of the focus has been on the rising interest of NSE blue-chip firms announcing coming dividend payouts. In general, this signifies the firms are confident and have adequate cash to navigate the Coronavirus crisis.

Among the headlines was the report of firms set to distribute sh102.9 billion as dividends to shareholders in the coming weeks. In perspective, this has rallied positive spikes in share trading of the companies expecting the shareholder payouts. Primary consideration was particularly notable in the appreciation of share prices of Safaricom, Co-operative Bank, and EABL after their corporate announcements back at the end of April. Kakuzi, Stanlib Fahari , BAT, LMT. AND Standard Chartered Bank also made their dividend announcements from their book closures although shares have had mixed reactions.

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About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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