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January 20, 2019

NSE corrects on profi t taking

The entry to Nairobi Stock Exchange NSE photo file
The entry to Nairobi Stock Exchange NSE photo file

The US was expected to raise the Fed Funds rate a quarter point yesternight to between 1.25 and 1.50 per cent, which will be its third hike of the year and fifth since the financial crisis.

A stunning political upset makes Jones the first Democratic Senator from Alabama in a quarter of a century and will trim the Republicans’ majority to just 51-49, meaning it could be harder for Trump to advance his policy agenda.

“The big issue now is whether Republicans will push through their tax bill before Christmas,” said Sue Trinh, head of Asia foreign-exchange strategy at RBC Capital Markets in Hong Kong.

Gold was near its weakest level in almost five months at $1,242.18 an ounce.

The Nairobi All Share, which had rallied +31.99% in 2017 through yesterday morning, matching a 34-month closing high previously reached in February 2015 met a wall of profit taking and corrected -1.05% to close at 174.14.

The Nairobi NSE20, which had rallied +17.12% in 2017 and therefore lagged the All Share [Its a Safaricom weighting issue], corrected 20.96 points lower to close at 3710.83.

Equity Turnover was better than brisk and clocked 1.429b.

The equity market looks like it was hit with a programme trade on the sell side today.

In Agriculture, Kakuzi sank -6.571% to close at 327.00 and traded 4,400 shares.

In Commercial and Services, Safaricom eased -1.79% off an all time closing high of 28.00 to close at 27.50 and traded 25.552m shares worth 705.736m which represented 49.36% of the total volume transacted. Safaricom has served up a +48.66% total return in 2017 outperforming the All Share Index by 62.2%, which is meaningful and has underpinned the Nairobi Index performance in 2017.

Kenya Airways continued its run higher and bounced +0.85% higher to close at 17.75.

Among Banks, Equity Group corrected -1.23% to close at 40.25 and traded 3.145m shares worth 126.857m. Equity Group trades on a Trailing PE ratio of 9.189. KCB Group closed unchanged at 42.00 and traded 1.606m shares. Interestingly in a soft market tilted to the downside KCB closed the session trading at 42.50 +1.19%. KCB trades on a Trailing PE ratio of 6.502. COOP Bank closed unchanged at 16.00 and traded 3.190m shares.

In Industrial and Allied, KenolKobil retreated -3.06% to close at 14.25 on heavy duty volume action and 1.271% of its shares [18.715m shares worth 266.397m]. KenolKobil trades on a Trailing PE Ratio of 8.6890 and accelerated H1 2017 PBT +20.573%. David Ohana has not put a foot wrong and KenolKobil is a buy on any further reverses.

KenGen had three buyers for every seller and firmed +0.58% to close at 8.60. The price is being defended at this level.

EABL was marked down -2.409% to close at 243.00 and traded 301,100 shares.

Bamburi Cement slipped -1.11% to close at 178.00 and traded 424,400 shares. Bamburi Cement issued a full year profits warning on the 30th of November.

ARM Cement sank -4.166% to close at 11.50 an April 2006 closing low.



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