KES stable as Britam succumbs to distribution activities

Equities market remained jittery on the third trading day with all the market indicators closing in the red.

The NSE-20 Share index plummeted by 0.61% to 5042.85 points as the NASI backed the trend retreating by 0.68% to 171.79 points. Market capitalization depreciated by 0.68% to KES 2.40Tn as equity turnoverlost a marginal 3.21% to KES 654.41Mn, flanked by a decline in the volumes traded.

East African Breweries (NSE: EABL) & Kenya Commercial Bank Ltd (NSE: KCB) were the most active counters accounting for 50.20% of the day’s traded value. Insurance sector sustained the losing streak with British American Investments Ltd (NSE: BRIT) wavering further by 8.99% to KES 20.25 thus, weighing on the NSE -20 share index for the last two days.

Britam is the only counter from the insurance segment represented in the benchmark index thereby denting the index in the present windfall of the stock price. The stock has tapered by 32.50% YTD as local investors persist in their distribution activities. The insurer has continued being plagued by numerous court battles since last year coupled with the slow business growth in their real estate segment. We anticipate that the present downtrend will not sustain in the medium term hence a reversal on share price performance is bound to occur.

Foreign investor participation remained robust during Wednesday’s trading session with foreigner’s accounting for 57.82% of total turnover against 42.18% local participation. Investors remained active on the supply side, resulting in net outflows worth KES 68.12Mn compared to net outflows worth KES 20.73Mn 76Mn on Tuesday.

The highlights of the day’s trading activity are listed below:

Foreign investors accounted for 57.82% of the NSE turnover as compared to 59.30% on Tuesday.

Investors engaged in distributive activities recording net outflows worth KES 68.12Mn relative to net
inflows worth KES 20.73Mn on Tuesday.

East African Breweries Limited (NSE: EABL) was the day’s highest traded stock, recording a turnover of
KES 203.60Mn to account for 31.11% of total market activity and 53.81% of foreign activity. Safaricom
Limited (NSE: SCOM) followed with a turnover of KES 44.63Mn representing 6.82% of total market activity
and 11.79% of foreign activity.

Kenya Commercial Bank Limited (NSE: KCB) posted the day’s highest inflows of KES 24.51Mn, East African
Breweries Limited (NSE: EABL) posted the day’s highest outflows worth KES 45.36Mn.

Currency
Performance: The Kenyan Shilling (KES) gained support from the sale of dollars yesterday indicated by a marginal gain of 0.07% in the USDKES exchange rate which remained steady at 93.71 (12:0pm GMT) during Wednesday’s trading session.

Traders stated that they expect the CBK to continue managing volatility in the exchange rate and will intervene in the likelihood of further weakening. On the other hand, the local unit portrayed weakening against the Sterling Pound (GBP) and Euro (EUR) as it shed 0.25% and 0.05%, respectively. Regionally, the KES shed 0.40% against the South African Rand (ZAR), as the Rand edged up a notch against the USD.

Large-Cap Index

• The Large Cap index decelerated by 0.69% in limbo with market capitalization that shaved 0.82% to
  KES2.02Bn. Volume of traded shares declined by a hefty 19.14% to KES 13.13Mn.

• British American Tobacco (k) Ltd (NSE: BAT) surged by 6.04% to KES 772.00 marking it as the top gainer in the large cap segment.

• British American Investments Ltd (NSE: BRIT) sustained the losing streak cutting back a further
  8.99% to KES 20.25.

Mid-Cap Index

• The Mid Cap index rose by a marginal 0.06% as market capitalization followed a similar trend up; 0.21% to KES 267.34Bn.Volume of trades edged higher by 44.61% to 3.11Mn.

• Trans-century Ltd (NSE: TCL) gained 5.69% to KES 17.65. This could be on account of heightened
  accumulation activities on the counter ahead of their FY14 results release on Friday 24th April 2015.

• Housing Finance Co. Kenya Ltd (NSE: HFCK) retreated by 3.65% to KES 33.00 on the back of reduced investor appetite as a result of a slash in the DPS (FY14- KES 1.50, FY15-KES 1.75).

Small-Cap Index

• The Small Cap Index contracted by 0.29% as market capitalisation rescinded by 1.07% to KES 39.17Bn.

• Crown Paints Kenya Ltd (NSE: BERG) was up 8.91% to KES 110.00 on the back of a thin but significant
  volume of 100 shares traded.

• E.A. Portland Cement Co. Ltd (NSE: PORT) declined by 8.40% to a Vwap of KES 54.50.