Kenya’s Half Year Tourism Arrivals Down 19 Percent

Shilling Sheds as Kenya’s Half Year Tourism Arrivals Go Down 19 Percent

The Kenyan Shilling (KES) registered extended losses against the US Dollar (USD) by 0.15% to 102.28 as data indicated that Kenya’s half year tourism arrivals were down 19%. Further shilling shedding was registered against the Euro (EUR) by 0.82%; following data indicating that the Euro zone’s consumer price inflation rose by 0.2% in July, in line with expectations. However, the shilling registered modest gains against the Sterling pound (GBP) by 0.11% to 159.55.

East African Breweries Unscathed by Atypical Sales Mix

Despite a mid-week rally, the Nairobi Stock Exchange closed the week in a bearish fashion; after both the NSE-20 dropped 1.84% to 4404.72 and the NSE All Share Index shed 1.70% to close the trading day at 148.39. The market breadth spelled a
different story as the number of stocks that declined, 16, failed to outweigh the number of stocks that advanced, 24; producing a positive divergence for the fourth consecutive day. Equity turnover bucked a trend and climbed 243.33% to KES. 1,237Mn, as market capitalisation dropped 1.70% to close at KES. 2077Bn. The market took a turn for the worse as the week drew to a close, as a slimming number of financial results were positive and the large cap stocks failed to suspend the market. Large foreign activity- at 91.65%- further emphasises this point as local investors remain alarmed.

A 2% decline in both mainstream and emerging beers against, a 9% increase and 32% surge in mainstream and emerging spirits- respectively- is evident that East African Breweries Ltd (NSE: EABL) sales mix is drifting from traditional performances. The Diageo subsidiary posted a net profit increase of 40% and sales increase of 6%; of which Genghis Capital estimated a 41% growth in net profit and 6.7% rise in sales revenue. These figures were achieved by consistent management of costs, as finance and admin cost dropped, and an unparalleled sales mix; despite popular belief that the sale of Central Glass Industries contributed to FY15 results (the figures will be realised in FY16). In regards to EABL’s required focus areas, the future looks bright for Kenya’s dominant brewery; as the government’s decision to decrease the tax on Senator Keg has resulted in sales double, since the beginning of July.

Equity Market Highlights

Equity Group Holdings Ltd (NSE: EQTY) closed as the most traded stock, accounting for 33.54% of the total value traded. Kenya Commercial Bank Ltd. (NSE: KCB) was second accounting for 25.88% of the days traded value; as recent positive financials attracted investors.

Umeme Ltd. (NSE: UMME) climbed to dominate the top gainers list, scaling 6.25% to KES 17.00. Longhorn Publishers Ltd (NSE: LKL) registered a 5.26% gain to KES 7.00, curving in as the day’s second best gainer.

Kapchorua Tea Co. Ltd. (NSE: KAPC) dropped to claim the day’s top loser, shedding 9.92% to KES 218.00; after closing the previous trading day as a top gainer. Kenya Airways Ltd. (NSE: KQ) followed a close second as it retreated by 9.52% to KES 5.70; as negative sentiment surrounded the stock, following poor financial results.

Foreign Investor Participation

Foreign investor participation accelerated to a new year high during Friday’s trading session accounting for 91.65% of total turnover against 8.35% local participation. Foreign participants reversed positions to engage in distributive activities; resulting in net outflows worth KES 194,778 compared to net inflows worth KES 67.0 Mn on Thursday.

Foreign investors accounted for 91.65% of the NSE turnover as compared to 8.35% on Thursday.

Sale side activities outweighed accumulation, resulting in net outflows worth KES 194,778 relative to net inflows worth KES 67.0 Mn on Thursday.

Equity Group Holdings Limited (NSE: EQTY) was the day’s highest traded stock, recording a turnover of KES 396.43 Mn to account for 32.06% of total market activity and 34.98% of foreign activity whilst Kenya Commercial Bank (NSE: KCB) followed with a turnover of KES 306.63 Mn representing 24.8% of total market activity and 27.06% of foreign activity.

British American Holdings Limited (NSE: BRITAM) posted the day’s highest inflows worth KES 7.87 Mn whilst Kenya Commercial Bank (NSE: KCB) posted the day’s highest outflows worth KES 9.06 Mn.