Kenyan Markets Continue to Retreat as Investors Take Profit

Nairobi Securities Market’s Momentum Still Negative, Its 3rd Week

Image I Courtesy NSE

Trading at the Nairobi Securities Exchange (NSE retreated for the third consecutive on profit-taking by investors. 

The  NASI,  NSE  25  and  NSE  20-share price indices declined by 0.7 percent,  1.3 percent and 0.2 percent, respectively during the week ending November  22.

Turnover fell slightly, posting a turnover of Ksh 2.5Bn compared to a turnover of Ksh 2.7Bn in the previous week.

The performance in NASI was driven by losses recorded by large-cap stocks with Bamburi, KCB, BAT, and Safaricom recording losses during the week of 9.8%, 2.1%, 2.0%, and 1.0%, respectively.

The foreign investors accounted for 77.7% of the week’s total activity, compared to 54.6% in the previous week.

Foreign investors turned net sellers after last week’s net buying activity, logging net outflows of Ksh 589Mn compared to a net inflow of Ksh 279Mn in the previous week.

Net buying activity was largely on Equity Group and KCB Group while net selling activity was majorly on Safaricom, EABL and BAT Kenya.

During the week, Barclays Bank Kenya, Standard Chartered Bank, and NIC Group released their Q3’2019 results, with their core earnings per share being posted as 19.0%, (1.3%), and (3.3%), respectively.

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Demand for the risk assets remain broadly fragile and is unlikely to materially pick up for the  remainder of 2020.

Thus far, earnings outlook for 2020 is still underwhelming mostly due to lagged effects of the recent private sector slack and  expected slower pick up in credit growth.       

Moreover, the bullish conviction in US stocks isn’t budging and should undermine foreign support for equities,” comments from the NCBA Research Department.