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November 14, 2018

Banking stocks lead at Nairobi bourse

Nairobi stock exchange NSE
Nairobi stock exchange NSE

“Starting last year ... the retailers in Kenya were in total disarray and we were able to secure seven sites and leases.” said Shoprite Supermarkets said in their commentary that accompanied their earnings release.

The Shilling which touched a 2018 high of 100.80 in early February was last at 101.40.

The Nairobi All Share rose +1.09 points to close by 181.77 led by banking stocks.

The Nairobi NSE20 rallied +15.74 points to close at 3750.75

Equity Turnover clocked 832.755m.

Safaricom was the most actively traded share today and firmed +0.85% to close at 29.75 and traded 10.937m shares worth 326.408m. Safaricom is +11.214% in 2018.

The banks were a strong stand-out feature as investors started to price in the lifting of the rate cap. Certainly, the Treasury, The Central Bank and the IMF are all keen but its a political move that has to be made and that is by no means a ''shoo-in''.

Co-operative Bank which announced it is set to take a $150 million seven-year loan from the IFC for onward lending to small firms. CO-OP Bank surged +3.16% to close at a 2018 high of 17.95. Co-op Bank is +12.1875% in 2018.

KCB Group rallied +2.717% to close at 47.25 (a 2018 closing high) and was trading at session highs of 49.00 +6.52% at the finale. KCB is +10.52% in 2018 and traded 2.062m shares.

Equity Group rallied +1.734% to close at 44.00 (a 2018 closing high) and traded 1.418m shares. Equity is +10.69% in 2018.

Barclays Bank firmed +0.9132% to close at 11.00 and has responded +14.583% in 2018 ahead of an imminent financial earnings release.

NIC Bank rallied +3.52% to close at 36.75 and traded 497,000 shares.

Unga which is subject to a Sh40 a share offer by Seaboard Corporation released H1 earnings where half-year turnover expanded +8.108%, profit before tax accelerated +282.935% and earnings per share clocked 4.36 versus 1.22 last time. These were startlingly shapely half year earnings. In the accompanying commentary we learnt, ''Selling and administrative expenses increased in the period compared to the prior year, mainly as a consequence of increased provisions for doubtful debts in the FMCG business.''

Unga firmed +1.807% to close at 42.25 (+45.68% in 2018 and the best performing share at the Securities Exchange this year) which is above the offer price of 40.00. These results justify a substantively higher offer compared to the offer dated February 22, 2018.

E.A Portland Cement reported half-year earnings where revenue slumped -17.731% and the loss after tax widened -290.766% to clock (969.573m) versus (248.121m). EAPC said gross profit margin declined from 18% to just 5% in the reporting period. They also said, ''Given that the company has enormous resources in the form of idle and fully mined parcels of land, board expects to be granted the necessary approvals to generate value from these idle parcels of land.''

My conclusions is that this is no longer a cement play but its a real estate play. EAPC traded 800 shares at 25.00 and is -7.407% year to date.

EABL closed unchanged at 239.00 and traded 621,300 shares worth 148.811m.

 

 

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