Equity Market
Total weekly turnover declined by 14.76% w-o-w to USD 33.04mn (KES 3.4bn), as foreign investor participation stood at 67.8% of the total turnover. They were avid buyers, accounting for 85.5% of total purchases, relative to 50.17% of total sales. NSE 20 stood at 3,833.07, having rose 1.59% w-o-w while the NASI settled at 141.38 (3.34% w-o-w).
The Banking sector recorded price appreciation, going up 2.1% w-o-w. The price rise was driven by NIC Bank (6.58% w-o-w) and KCB Bank (4.6% w-o-w). Barclays Bank however noted a –1.2% w-o-w to KES 12.25. The banking sector accounted for 52.3% of total market turnover.
Fixed Income
Trading at the debt market declined during the week ending 5th February 2016, as the week’s turnover stood at USD 39.4 MN (KES 4.02 BN), down 34.7 % w-o-w from last week’s USD 60.2 MN (KES 6.2 BN). The most actively traded bond was the 1 year bond, issue number IFB 1/2015/9Yr, traded between 13.90% and 15.70% during the week, accounting for 24.1% of the week’s turnover. Notably, the 2 year bond yield was up 414bps y-o-y to 15.6939% in the week ending 29th January 2016 (+1bps w-o-w).
EAC Markets Upshot
Uganda: The USE ALSI gained 1.48% w-o-w to close at 1,785.59 while USE LSI gained 1.52% wo-w to close at 417.29. Total turnover came to a close of UGX 3.4bn (USD 980,465). National Insurance Corporation (NIC) led the losers, declining 8.3% w-o-w to close at UGX 11.00.
Rwanda: The USE RSI and RSE ALSI remained constant to close at 146.79 and 130.60. The week’s market turnover was recorded at RWF 123.6bn. (USD 2.2mn).
Tanzania: The DSEI gained 3.50% w-o-w to close at 2,371.27 while DSE TSI declined 1.29% w-o-w to close at 4,208.50. African Barrick Gold gained 7.6% w-o-w to stand at TZS 6,960.00 emerging as the week’s top gainer. Total volumes were recorded at 13.16mn shares. Total turnover closed at TZS 11.3bn.
Kenyan Market News
Standard Gauge Railway earns Bamburi KES 1bn
Bamburi Cement is among local firms contracted to construct the Standard Gauge railway (SGR) which is currently at its first phase from Mombasa to Nairobi. The cement manufacturer said it has earned more than KES 1bn have supplied 300,000 tonnes of cement since September 2014. Bamburi is expected to record growth in revenue fueled by the Standard Railway Gauge’s demand for cement. Apart from Bamburi E.A Portland Cement, ARM Cement and Savannah Cement also supply cement to the SGR project. (Source; Business Daily, Dyer & Blair Research)
E.A. Breweries closes its South Sudan depot.
East African Breweries (EABL) closed its South Sudan deport due to safety concerns from the civil war and the decline of the South Sudan dollar. The weakening of the South Sudan dollar, low sales and the inaccessibility of the US dollar which is the main currency used for trade led to a KES 908mn foreign exchange loss booked by EABL. EABL will be operating through its sales force in South Sudan getting stock from Kenya. EABL’s closure of its South Sudan deport decreases the company’s exposure to the civil war while still ensuring their products are sold in South Sudan. (Source; Business Daily, Dyer & Blair Research)
Kenya January Inflation at 7.78%.
Kenya National Bureau of statistics recoded January inflation at 7.78% down from 8.01% recorded in December 2015. Food and Non Alcoholic drink index increased by 0.47% m-o-m attributed to the increase in prices for some food items outweighing decreases. There was a 0.14% increase in Alcoholic Beverages, Tobacco and Narcotics on account of the increased excise duty. Transport index dropped 0.94% mainly attributed to the reduced cost of petrol and diesel.( KNBS, Dyer & Blair Research)
Stanlib Finalises Acquisition of Donholm’s Greenspan Mall.
Stanlib Investments concluded the purchase of seed property Greenspan Mall located in Nairobi, Kenya. The acquiring cost is estimated to be KES 2bn from KES 3.6bn raised during its Initial public offering (IPO) in 2015. Greenspan mall aims to enhance the lifestyle of the residents in the densely populated area of Donholm and houses major brands like Tuskys, Aga Khan, Bata and many more. The retail centre sits on a 3.8 ha, and is an ideal location with the potential to improve the returns through development of excess land. The new acquisition is expected to give the Fahari I-Reit steady rental income. Fahari I-Reit planned to invest 75% of total asset value in real estate within Kenya and a maximum of 25% in cash or cash like investments. The acquisition of the Greenspan Mall is 55% of total asset value, thus at a minimum the company has KES 0.7mn for other properties . Other companies that are showing interest in using Reits are UAP Holdings, Centum Investment and National Social Security Fund (NSSF). (Source; Business Daily, Dyer & Blair Research)
NSE Plans to provide a platform to trade carbon credits.
Nairobi Securities Exchange (NSE) plans on setting up a carbon tracing board for Kenyan companies with carbon credit to facilitate sell to foreign countries and manufacturers. Emissions trading, also known as ‘Cap and Trade’, is an approach that seeks to address climate change. A limit is set on the total greenhouse gasses (GHG) emission allowed to be released in a given period, participants can then trade (buy/sell) depending on whether there is a surplus or a shortfall. If a participant emits less they can sell the remainder to participants who emit more. Kenya Power, Kengen, Mumias and E.A. Portland cement participate in carbon trade arrangements. (Source; Company filling, Dyer & Blair Research)
East Africa News
Rwanda Issues a 5yr Bond.
Rwanda will issue a 5yr bond this month seeking to raise FRW15bn (USD20mn). The proceeds of the bond will go towards infrastructure projects and Capital Market development. The National Bank of Rwanda will receive bids from Monday 22 February 2016 to 24 February 2016.
Research by Dyer and Blair Investment Bank.