NSE Signs Up Commercial Banks Ahead of Derivatives Launch

Equities

Nairobi Securities Exchange (NSE) has signed up six commercial banks who will act as clearing members in derivatives trading, set to be launched later this year. The clearing members will be necessary constituents of the central counter party (CCP) clearing ecosystem and will be performing the central tasks of clearing and settling transactions. The futures derivatives market launch will mark a key milestone to the Exchange. We expect that the derivatives market to increase the attractiveness of the exchange. Trading of the futures will allow companies to hedge against commodity price, interest rate and exchange rate related risks as well as allow increased liquidity in the underlying assets.

The Kenyan equities market was characterized by mixed trends on the market indices. The NSE All Share Index lost ground by 0.08% to close at 136.55 points. The NSE 20 Share Index advanced marginally by 0.39% to perch at 3759.86 points while the NSE 25 Share Index appreciated by 0.14% to close at 3912.36 points. Equity turnover improved slightly, edging up by 3.49% to close at KES 0.566 billion. Market capitalization followed suit, declining by 0.34% to close at KES 1,924.29 billion. Market breadth, displayed an improvement from yesterday’s trading, as the number of stocks that advanced 16 were outweighed by the number of stocks that declined 19.

Equity Market Highlights

Kenya Commercial Bank Ltd (NSE: KCB) was the most actively traded stock today accounting for 18.64% of the total market value traded activity. British American Tobacco Kenya Ltd (NSE: BAT) closed in second, accounting for 18.43% of total market turnover. Williamson Tea Kenya Ltd (NSE: WTK) topped the gainers list in the day, recording an 8.24% to close at KES 184.00. Eveready E.A Ltd (NSE: EVRD) emerged as the day’s second biggest gainer, with a 7.06% rise to KES 22.75.

Kapchorua Tea Ltd (NSE: KAPC) was the top loser of the day, plunging by 9.90% to close at KES 182.00. Limuru Tea Ltd (NSE: LIMT) trailed behind, declining by 9.68% to close at KES 980.00.

Research by Genghis Capital.