BOC Swells the Raft of Profit Warnings in 2015

Diverse trends were illustrated on the key indicators as price correction continued on various counters. The NSE-20 Share index was back in the 4000 space, edging up by 0.19% to close at 4002.63 points while the NSE-25 Share Index bucked the trend losing 0.12% to close at 4165.64 points. The Nairobi All Share Index (NASI) was up; 0.24% to close at 144.39 points.

Equity turnover shrunk further by 19.71% to close at KES 0.644 Billion whilst the market capitalization expanded marginally by 0.25% to settle at KES 2.031 Trillion.

BOC Kenya Ltd (NSE: B.O.C) added onto the list of corporates that have issued profit warnings this year, following an announcement that they presage to report at least a 25% decline on their net earnings for the current financial year ending on 31st December 2015. This was attributed to a number of factors including; lower sales level due to competition from oxygen and nitrogen imports, exchange losses occasioned by the steep depreciation of the KES against the USD and a large deferred tax credit accounted for in the income statement in 2014 that is not expected to recur in 2015. Due to this we anticipate that minority shareholders’ confidence will taper resulting into heightened supply side pressures.

Equity Market Highlights

East African Breweries Ltd (NSE: EABL) retained the most actively traded stock position accounting for 43.69 % of the total market value traded activity. Kenya Commercial Bank Ltd (NSE: KCB) closed in second place, accounting for 16.34% of the days traded value.

Flame Tree Group Holdings Ltd (NSE: FTGH) capped the gainers chart having surged by 9.60% to close at KES 6.85 buoyed by only 600 shares traded. Kapchorua Tea Co. Ltd (NSE: KAPC) gained 9.55%, to close at KES 172.00, benefitting from an illiquidity premium.

Longhorn Publishers Ltd (NSE: LKL) led the losers pack slumping by 4.71% to close at KES 4.05. Crown Paints Kenya Ltd (NSE: BERG) came in second place, shaving off 4.62% to close at KES 62.00.