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February 18, 2019

EABL gains on Sh15bn Kisumu plant plan

The FX markets have seen some high-octane action over the last sessions. Central Bankers from Canada to the UK to the ECB have been talking tough and around the withdrawal of stimulus. The euro pressed on to $1.1405 versus the dollar and clocked a +3% rally in three sessions, having climbed three per cent in as many days. The Canadian dollar vaulted to 1.3027, having enjoyed its biggest daily gain in three months, while sterling rebounded to just shy of 1.30. The “Trump Dollar” has become a “Chump Trade” as the dollar gets sold off across the board.

Kenya announced it has suspended its early oil export plan. It was always a bit of a PR stunt and with oil below $50.00 a barrel, it would not have received any positive PR traction and might even have created a negative feedback loop.

The Nairobi All Share closed lower for the second session and closed -0.71% at 153.22.

The All Share has corrected -1.504% over two sessions and since closing at a 23-month high. I expect a deeper correction.

The NSE20 Index closed -12.65 points lower at 3596.56.

Equity turnover clocked 765.803m but volume was concentrated in BAT, Safaricom and Equity.

 Safaricom shaved off -1.08% to close at 23.00 and traded 9.288m shares. Safaricom sits -2.127% below a record closing high set on three occasions this month and is expected to post fresh all time highs in short order.

 Equity Group firmed 25cents to close at 38.00 and traded 4.245m shares. Equity is +26.66% through 2017.

 EABL’s announcement of a Sh15bn investment in Kisumu and the visit of its CEO Ivan Menezes to State House certainly captured mind-share. EABL issued a cautionary note yesterday morning which said in part: “The investment is likely to spread over a period of two years prior to completion.Modalities of funding for the project are still under deliberation and shall be communicated to the regulators and shareholders in due course.”

 The second part of this announcement caught people’s attention. Counter-intuitively, it speaks to EABL’s muscle that they can announce a $150m investment without having to have locked up the funds.EABL edged +0.39% higher to close at 260.00 on light volume of 8,300 shares. EABL is +6.55% through 2017.

 BAT was the most actively traded share at the Exchange and traded 328,900 shares all at 802.00 -4.3%. BAT has been a significant Under-Performer in 2017 and is -11.77% through 2017.

 KenGen continued to see profit-taking after a stellar run-up in 2017 and closed -4.76% at 8.00. KenGen is +37.93% through 2017.

 Mumias Sugar rebounded +5.00% to close at 1.05 helped by the news that the GOK was set to disburse 500m to the Company next week.

 Crown Paints rebounded +6.29% to close at 76.00. Its a thinly traded share and talk about a possible share Buy-Back has given the stock a lift. Crown Paints is +80.95% in 2017.



Aly-Khan is a financial analyst

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