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November 21, 2018

NSE recovery mode after SC ruling

Nairobi stock exchange NSE
Nairobi stock exchange NSE

Internationally, Gold has surged to levels around $1,340.00 (Sh138, 358.752) and this has been directed correlated to Geopolitical Stress Levels which spiked big on developments on the Korean Peninsula.

It is difficult to see a military solution to this situation and for now PyongYang has been much calibrated.

Base Metals led by Copper +50.00 per cent over 12 months have also been seriously muscular.

Moody’s Ratings has said that last Friday's Supreme Court Ruling on the Presidential Elections is perceived to be a “credit negative”, citing that the announcement of the ruling and subsequent repetition of the presidential results will result in policy stagnation and uncertainty.

The Nairobi All Share followed on yesterdays +0.98 per cent gain with a further +0.22 per cent gain to close at 162.27.

The All Share slumped -5.2199 per cent in the 2 sessions after the Supreme Court decision was pronounced and has now rebounded +1.21 per cent over the subsequent two sessions.

The Nairobi NSE20 which had retreated -6.3819 per cent since the Supreme Court decision, rebounded this morning to 16.89 points to close at 3786.92.

Equity Turnover was brisk and clocked 1.675b shillings.

Safaricom, Kenya’s main mobile phone operator is planning cross-border expansion for the first time, into the untapped market for ecommerce and mobile payments, according to its chief executive Bob Collymore.

Collymore said Safaricom, would initially target its east African neighbours, but is also considering West Africa.

Other countries would see Safaricom as “a bit more of a threat if we come in as a mobile operator”, Collymore told the Financial Times in an interview with John Aglion

“But, we want to go into white space that no one is in at the moment and no one is in ecommerce.”

Safaricom’s version of ecommerce, to be called Masoko, would aim to be more like China’s Alibaba and combine ecommerce and mobile payments, Collymore said, adding that, “In two to three years’ time we will be in four to five African countries,” he said. “I don’t think we’ll step out of Africa because that’s too far and you have lots of other challenges.”

He noted that Safaricom is also taking on specialist staff to analyse the 2 terabytes of customer data it generates every day.

Safaricom closed unchanged at 24.75 [+34.30% on a Total Return Basis in 2017] and saw heavy volume action of 36.15million worth 902.742million.

Uchumi bounced +5.26 per cent making that a +12.67 per cent, 2 session gain since the High Court declared the cash-strapped retailer to be the legal owner of a 20-acre piece of land valued at around Sh2.3 billion.

The land in Nairobi’s Roysambu area on the Thika super highway. Uchumis market Cap is 1.45b and less than the value of the Land.

Banks

Equity Bank firmed +0.65per cent to close at 39.00 on good volume action of 6.066m shares worth 237.868m.

Equity Bank is +36.66 per cent in 2017 and trades on a Trailing PE Ratio of 8.904 and reported a -7.836 per cent decline in H1 2017 Earnings per Share.

Diamond Trust Bank was heavily traded with 893,200 shares worth 158.097million changing hands and an unchanged result at 177.00.

DTB has served up a +52.20 per cent total return in 2017, trades on a Trailing PE Ratio of 6.57 and reported a marginal -5.363 per cent H1 2017 Earnings Per Share decline.

It’s a strong, geographically diverse, well organised and managed Franchise.

COOP Bank firmed +0.617 per cent to close at 16.30 and traded 6.054million shares.

KCB firmed +0.6 per cent to close at 42.00 and traded 902,100 shares.

BRITAM EA rallied +3.35 per cent to close at 13.85 and traded 809,100 shares.

EABL rebounded +1.121 per cent to close at 249.00 and traded 206,400 shares. Kenya contributed 74 per cent of EABLs full year Sales and you would think it’s been soft.

BAT traded 100,900 shares all at 80,000 and unchanged, on a trailing PE of 18.895 and reported a -9.311 per cent decline in H1 EPS.

Business Daily reported that ARM Cement has embarked on a new round of fundraising that will see the company sell a stake to a new investor in the short term, diluting existing shareholders.

ARM recently raised Sh14 billion by issuing a 42 per cent equity to UK-based CDC Group, says it requires additional funds to steady current operations and fund new investments.

Chief executive Pradeep Paunrana told the Business Daily the amount to be raised from the sale is yet to be determined, adding that the company’s existing major shareholders will provide debt funding in the interim period when it will also complete the sale of its fertiliser business.

“We will first sell the non-cement business, take short term shareholder loans and then bring a strategic long-term investor,” Paunrana said.

“We will do what is right for all shareholders to restore the value. The value has been eroded because of our Tanzanian operations.”

ARM Cement eased -1.50 per cent to close at 16.35.

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