Kenya GDP to Rebound To 7 percent in 2016

The equities segment was alight with mixed sentiments as key indicators traded variably for the day.

The NSE-20 share index pulled up 4.46 points to 4928.91 points while the NASI clawed back 0.54% to 166.48 points. Market capitalization retreated in tandem with the NASI to close at KES 2.33Tn as equity turnover rescinded heavily by 57.79% to KES 498.2Mn.

Safaricom Ltd (NSE: SCOM) and Kenya Commercial Bank Ltd (NSE: KCB) were the most active counters accounting for 47.28% of the day’s traded value.

In its latest report on Sub Saharan Africa, International Monetary Fund (IMF) has estimated Kenya’s GDP growth will rebound to levels of 7% in 2016; last seen preceding the 2007/08 post-election violence and global financial crisis. Kenya being a net oil importer is projected to benefit heavily from the attrition in oil prices, trimming its current account deficit to 7.4% (2016) from the current 8.9% of GDP.

Based on a PricewaterhouseCoopers (PWC) report launched early Aril, Kenya saved KES 18.6 Billion in 2014 and help pull down the country’s import bill by 30 per cent, from the conventional 50 percent, owed to the heavy decline in oil prices from USD 115pbl to USD 60pbl(Dec-2014).

NSE Equity Market Highlights

Safaricom Ltd (NSE: SCOM) was the most traded stock of the day accounting for 28.36% of the total value trade with Kenya Commercial Bank Ltd (NSE: KCB) following in pursuit to account for 18.92% of the total value.

Olympia Capital Holdings Ltd (NSE: OCH) was the biggest gainer of the day up 10.0 % to KES 5.50 reversing previous days’ momentum.

Housing Finance Co. Ltd (NSE: HFCK) surged 5.04% to KES 31.25 fanned by accumulation activities following the stock’s heavy decline to a near 52-week low price of KES 29.75.

Unga Group Ltd (NSE: UNGA) was the major laggard netting off 4.92% to perch at KES 43.50 whereas CIC

Insurance Group Ltd (NSE: CIC) shed 3.39% impaled by heavy distribution activities.

Foreign Investor Participation

Foreign investor participation contracted during Thursday’s trading session accounting for 35.10% of total turnover against 64.90% local participation. Investors were active on the buying side resulting in net inflows worth KES 1.86Mn compared to net inflows worth KES 27.97Mn on Wednesday.

Foreign investors accounted for 35.10% of the NSE turnover as compared to 57.01% on Wednesday.

Investors remained dominant on the accumulative front recording net inflows worth KES 1.86Mn relative to net inflows worth KES 27.97Mn on Wednesday.

Safaricom Limited (NSE: SCOM) was the day’s highest traded stock, recording a turnover of KES 42.03Mn to account for 17.73% of total market activity and 50.51% of foreign activity. Bamburi Cement Company Limited (NSE: BAMB) followed with a turnover of KES 37.70Mn representing 7.57% of total market activity and 21.56% of foreign activity.

Bamburi Cement Company Limited (NSE: BAMB) posted the day’s highest inflows of KES 37.70Mn, whilst Safaricom Limited (NSE: SCOM) posted the day’s highest outflows worth KES 42.03Mn

Currency

Performance: The Kenyan Shilling (KES) shed against the US Dollar (USD) by 0.34% to 97.13, as the Central Bank of Kenya (CBK) entered the market ; offering KES. 4Bn in REPOS and term auction deposits. The U.S Federal Reserve remained optimistic that the poor U.S data was due to ‘transitory’ factors, speaking after FOMC minutes were released; causing hedge funds to seek next big shorts as they saw the dollar rally fizzle out.

The KES also lost against the British Pound (GBP) by 1.12% to 152.26, as the pound benefitted from U.K retail sales jumping in April. This however added to speculation that inflation pressures are picking up in the British economy. The EURO (EUR) gained against the KES by 0.55%, taking the latter down to 108.08 – despite poor negotiations in Greece resulting in demand for a referendum; hoping that the population will be of more help than current negotiations.