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November 21, 2018

KPLC rallied ahead of Chumo’s exit

The Chinese yuan had its biggest single day up-move for 12 months yesterday. Markets are extremely worried that China is going to introduce further restrictions on its citizens in moving money out of China. The digital currencies like bitcoin +126 per cent in 2016 have become a bull proxy for Chinese capital flight worries.

Reuters has reported that Kenya’s Central Bank sold dollars after the Kenyan shilling weakened to 103.10/20. It indicated commercial banks quoted the shilling at 103.10/20 to the dollar early yesterday compared with Tuesday’s close of 102.80/103.00. The shilling last traded at its present levels in mid-October 2015, when it hit a low of 103.50/60 on October 13, Reuters added.

‘The Nairobi All Share fell back 0.34 points to close at 132.27. The NSE20 closed 12.11 points lower at 3194.13.Equity turnover clocked 356.93 million. Safaricom closed unchanged at 19.00 and traded 2.623 million shares. The Supply has thinned out at these levels signaling upwards price action is expected in short order. Nation Media which got badly hammered through 2016 retreated -5.37 per cent to close at 88.00 and marginally above 2009 lows.

 Kenya Power rallied +2.5 per cent to close at Sh8.20, and was trading at Sh8.55, +6.88 per cent session highs at the closing bell. Trading was light just 14,800 shares and buyers outpaced sellers by a factor of 15 to 1. Yesterday’s price action was therefore interesting. KenGen announced that the MD Albert Mugo’s contract had been extended for another 12 months. This was a good decision. KenGen eased five cents to close at Sh5.70 and is egregiously undervalued. Britam which rallied +26 per cent on the opening session of 2017 and on the news that the IFC was set to snaffle up a 10.37 per cent stake, fell back -7.93 per cent to close at Sh11.60 and traded 1.161 million shares worth 13.510 million (1,239 per cent more shares than the previous session). The IFC is subscribing for the shares at 15.85 a share, which is substantial premium to the current price. The IFC-Britam news positively spilled over into other counters in the Insurance segment.

Jubilee Insurance traded 43,000 shares all at Sh490.00 and unchanged. Kenya Re firmed +1.11 per cent to close at Sh22.75 and traded 605,300 shares. Standard Chartered which was the only banking stock to appreciate in 2016 pushed +1.06 per cent higher to close at Sh190.00, and traded shares as high as Sh196.00 +4.26 per cent. Supply is thin and buyers outpaced sellers by more than 10 to one. Barclays Bank rose +1.71 per cent to close at Sh8.90, and after a steep sell-off in 2016 it looks a value proposition. 

Aly-Khan is a financial analyst

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