Kenya GDP Growth Rate at 4.7 percent in Q1 2015

Fair Competition Commission Recalls Decision on EABL

The local market failed to live up to the previous day’s performance, as both indexes dropped, bucking a three day trend.

The NSE-20 share shed 0.97% to reach 4858.42, as the NASI lost 0.97% to 163.21 points. Market Capitalisation and Equity Turnover followed suit as they dropped 0.73% to KES. 2,285bn and a significant 86.20% t0 1.232bn, respectively. The Equity Turnover dropped such a significant percentage due to the previous day’s record high of KES. 8.93bn. The number of stocks that declined (26) slightly outweighed those that advanced (16); as the A-D indicator worsened from the previous day.

The equity news, today, was plagued with changes at one of the region’s largest breweries; East African Breweries (NSE: EABL). The dominant player- in Kenya- found itself in a position to lose a 51% shareholding stake, after the Fair Competition Commission (FCC) of Tanzania gave notice of intention to recall approval for the former’s acquisition of Serengeti Breweries.

The competition watchdog stated the reason was a breach in EABL’s assurance that Serengeti would grow faster than it was prior to the 2010 acquisition; the 51% stake cost the Diageo subsidiary KES. 4.9 billion. The company also announced two senior appointments, today, with Mr. John O’Keeffe as Director of the Board of East African Breweries and Jane Karuku as the new managing director of Kenya Breweries Limited. In unrelated news, Chase Bank was the first bank authorised to act as a securities dealer; allowing the bank to buy and sell bonds in the secondary market (as well as underwrite issues of such securities).

Equity Market Highlights

East African Breweries Ltd (NSE: EABL) was the most traded stock; narrowly overtaking Equity Group

Holdings Ltd. and accounting for 27.62% of the total value traded. Equity Group Holdings Ltd (NSE: EQTY) was second accounting for 20.54% of the days traded value.

Kapchorua Tea Co. Ltd (NSE: CFC) topped the top gainers list scaling 11.54% to KES 145.00. Liberty Kenya Holding Ltd. (NSE: BOC) registered a 4.12% gain to KES 25.25 on the back of a thin but significant volume of 300 shares traded, curving in as the day’s second best gainer.

Williamson Tea Kenya Kenya Ltd (NSE: BERG) remained the day’s top loser, declining by 11.59% to KES 366.00.

CFC Stanbic of Kenya Holdings Ltd. (NSE: CFC) retreated by 6.14% to KES 107.00; after ranking amongst the top gainers yesterday.

Foreign Investor Participation

Foreign investor participation held steady during Wednesday’s trading session accounting for 80.26% of total turnover against 19.74% local participation. Investors were active on the sell side; resulting in net outflows worth KES 31.53Mn compared to net outflows worth KES 318.07Mn on Tuesday.

Foreign investors accounted for 80.20% of the NSE turnover as compared to 89.47% on Tuesday.

Investors engaged in distributive activities, resulting in net outflows worth KES 31.53Mn relative to net inflows worth KES 318.07Mn on Tuesday.

East African Breweries Limited (NSE: EABL) was the day’s highest traded stock, recording a turnover of KES 316.91Bn to account for 25.72% of total market activity and 32.05% of foreign activity whilst

Equity Holdings Limited (NSE: EQTY) followed with a turnover of KES 247.70Mn representing 20.10% of total market activity and 20.10% of foreign activity.

Kenya Reinsurance Limited (NSE: KNRE) posted the day’s highest inflows of KES 9.14Mn, whilst Kukuzi Limited (NSE: KUKZ) posted the day’s highest outflows worth KES 20.84Mn.

Kenya GDP Growth Rate at 4.7 percent in Q1 2015

Performance: The Kenyan Shilling held a mixed performance against all its international peers during Wednesday’s trading. The shilling exerted further downward pressure shedding 0.61% against the US Dollar (USD) to breach the 99 upper limit to settle at 99.24. This follows 1st Quarter 2015 data expanding by 4.9% compared to 4.7% the previous year.

Further data indicates that the main foreign exchange earner, hotel and tourism, with the latter contracting by 7.5%. Further weakening of the shilling was registered against the Sterling Pound (GBP) by 0.09% to 155.24. On the regional front, the shilling gained 0.35% against the Tanzanian shilling following two days of shedding to settle at 20.09.