‘Grexit’ Continues To Weigh On Sentiment

NSE Circumspect Atmosphere Sees Gathering at Counters

The market activities got off to a positive start as both indexes gained, at a time when investors’ activity indicated improving market conditions. The NSE-20 share rallied 0.57% to reach 4837.58, as the NASI bucked a trend and gained 0.35% to 163.08 points. Market Capitalisation and Equity Turnover followed suit as they garnered 0.35% and a significant 53.65%, respectively, rewarding investors that continued to participate in the testing environment. The number of stocks that declined (18) slightly outweighed those that advanced (17); after previously closing the week as equals.

As the week begins, we focus on the on-goings largely affecting the capital markets; in which foreigner investors are causing the most impact. The Capital Markets Authority blamed the stock brokerage system for being unable to reject the breach in the caps, the rule maintains foreign investors’ participation to 75% of listed stocks. Previous CMA data shows that amongst others, British American Tobacco (NSE: BAT) and Total Kenya (NSE: TKL) were found at 76.14% and 94.19% foreign stockholders, respectively. This may be highlighted as foreign investors gather towards particular stock as prudent research increases. The circumspect atmosphere has seen investors react more to news, as top losers in the banking sector- which shed KES 42bn this year- have all been hit by negative news; most notably Housing Finance and CfC Stanbic which lost 39% and 14% (respectively).

Equity Market Highlights

East African Breweries Ltd (NSE: EABL) was the most traded stock accounting for 35.40% the total value traded. Kenya Commercial Bank Ltd.es Ltd (NSE: KCB) followed closely behind accounting for 19.90% of the days traded value.

Eaagads Ltd (NSE: EGAD topped Standard Croup Ltd to make the top gainers list scaling; 10.00% to KES 38.50.

Standard Group Ltd (NSE: SGL) registered a 6.58% gain to KES 40.50 on the back of a thin but significant volume of 1,100 shares traded, curving in as the day’s second best gainer.

Crown Paints Kenya Ltd (NSE: BERG)remained the day’s top loser declining by 9.09% to KES 90.00, after closing the week in a similar fashion; due to investors sell off their credited bonus shares. Flame Tree Group Holdings Ltd (NSE: FTGH) retreated by 8.16% to KES 2.25.

Foreign Investor Participation

Foreign investor participation was robust during Monday’s trading session accounting for 75.40% of total turnover against 24.60% local participation. Investors were dominant on the sell side; resulting in net outflows worth KES 43.34Mn compared to net outflows worth KES 20.89Mn on Friday.

Foreign investors accounted for 75.40% of the NSE turnover as compared to 72.02% on Friday.

Investors engaged in distributive activities, resulting in net outflows worth KES 43.34Mn relative to net inflows worth KES 20.89Mn on Friday.

East African Breweries Limited (NSE: EABL) was the day’s highest traded stock, recording a turnover of KES 254.98Bn to account for 35.18% of total market activity and 46.59% of foreign activity whilst Kenya Commercial Bank (NSE: KCB) followed with a turnover of KES 104.26Mn representing 14.36% of total market activity and 19.05% of foreign activity.

Kenya Commercial Bank (NSE: KCB) posted the day’s highest inflows of KES 37.30Mn, whilst Kenya Commercial Bank Limited (NSE: KCB) posted the day’s highest inflows worth KES 37.30Mn.

‘Grexit’ Continues To Weigh On Sentiment

Performance: The Kenyan Shilling shed against the US Dollar, by 0.15% to 98.65, marginally receding as tight liquidity in the local market prevented further losses. The greenback rallied against a basket of currencies as concerns of a potential Greece default, termed ‘Grexit’, continued to weigh on sentiment.

The shilling also shed against the Sterling pound (GBP), by 0.07% to 155.06, despite data showing that total U.K net lending to individuals increased below forecasts. On the local front, the shilling fared well, gaining against the Tanzanian shilling and South African Rand by 13.6% and 1.1% to close at 20.02 and 8.05, respectively.