KenolKobil Ltd Posts a 73% Growth in Profitability

Equities market activities commenced on a positive note as all the market indicators closed in the green. The NSE-20 share index garnered 1.55% to perch at 4483.58 while the NASI swung up by 2.19% to close at 153.74 points. Equity turnover followed a similar trend, appreciating by 6.24% to close at KES 0.499Bn whilst the market capitalization closed at 2.152Tn, a 2.19% gain from the previous trading session.

The positive trend in the market was catapulted by increased accumulation activities ensuing from foreigners especially on Safaricom, which closed in at KES 15.35 after registering a 5.50% gain. The advancers outweighed the decliners (28; 7) an indication that market conditions had slightly improved from the previous week.

Oil marketer, KenolKobil Ltd (NSE: KENO) delivered excellent results for the half year ended in June 2015 with a 73% increase in profits after tax to KES 918Mn. The exemplary results resulted from the return of the group to profitability in all business segments. Effective inventory management resulted in the group registering an 8% increase in volumes in spite of the increased competition in the market translating to improved gross profit of KES 2.9Bn (HY14, KES 2.5Bn).

Growth in net profit margins was underpinned by a considerable reduction of finance costs by almost half (43%) to KES 379Mn (HY14, 669Mn). A downward trend in oil prices is expected to continue during the second half of 2015, thus we portend a positive impact on their bottom line.

Equity Market Highlights

Safaricom Ltd (NSE: SCOM) was the most traded stock for the day accounting for 31.25% of the total value traded following renewed foreign activity on the stock.

Kenya Commercial Bank Ltd (NSE: KCB) came in second accounting for 28.06% of the days traded value. Kakuzi Ltd (NSE: KUKZ), topped the gainers list for the day appreciating by 8.62% to KES 353.00 on the back of increased investor activity, while British-American Investments Co. (Kenya) Ltd (NSE: BRIT) was up; 7.42% to KES 19.55.

Car and General (K) Ltd (NSE: C&G) was the major laggard of the day, depleting 3.57% of its value to KES 40.50 on account of the investors reacting to the profit warning issued by the company last week. TPS Eastern Africa Ltd (NSE: TPSE) trailed behind sliding by 3.03% to KES 32.00.

Foreign Investor Participation

Foreign investor participation was robust during Monday’s trading session accounting for 77.73 % of total turnover against 22.27% local participation. Foreign participants were dominant on the accumulative front; resulting in net inflows worth KES 12.82Mn compared to net inflows worth KES 33.24Mn on Friday.

Foreign investors accounted for 77.73% of the NSE turnover as compared to 70.00% on Friday.

Investors engaged in accumulative activities, resulting in net inflows worth KES 12.82Mn relative to net inflows worth KES 33.24Mn on Friday.

Safaricom Limited (NSE: SCOM) was the day’s highest traded stock, recording a turnover of KES 132.00Mn to account for 26.44% of total market activity and 34.02% of foreign activity whilst Kenya Commercial Bank Limited (NSE: KCB) followed with a turnover of KES 132.02Mn representing 26.45% of total market activity and 34.02% of foreign activity.

Equity Holdings Limited (NSE: EQTY) posted the day’s highest inflows worth KES 8.70Mn whilst Kenya Commercial Bank Limited (NSE: KCB) posted the day’s highest outflows worth KES 2.31Mn.

Kenyan Shilling Trades On Stable Note

The Kenyan Shilling (KES) posted modest gains against international peers at the start of the week as its gained support from tight liquidity in the money market. The USDKES exchange rate garnered 0.11% to 101.11 (12:30pm GMT) as dollar demand mellowed. On the other hand, the EURKES exchange rate shed 0.48% as the Euro shored up with reports suggesting that a Greek bailout deal will be reached with creditors before the 20th August deadline, when a 3.4 billion Euro repayment is due to the European Central Bank. Regionally, the KES continued to mark gains against the Ugandan Shilling (UGX), gaining by 0.22% even the peer currency trekked on a recovery path.