Cooperative Bank’s Comprehensive Weekly Market Review & Current Stock Picks

During the week, the activities in the equities market went down as compared to the previous week. During this week, the total turnover was registered at 1.6 billion shillings compared to last week’s 1.9 billion shillings. The total number of shares traded on the stock market for the week dropped to 66 million shillings as compared to 134 million shillings the week before.

Foreign demand on the other hand surpassed their supply on the stock market as they bought more than they sold which generally accounted for 75 percent and 70 percent of the total market turnover.

During the week, Britam was the highest gainer of the week while housing finance Kenya declined the most as the most loser of the week.

The NSE 20 Share Index lost 44.61 points to close the week at 3,954.65 points. All Share Index (NASI) on the other hand was down slightly to settle at 145.61 points.

On the fixed income front, the Bond Market recorded a deceleration of activity as compared to previous sales, with bonds totaling to 8.4 billion down from 11.32 billion posted the previous week.

Interest rates on short tenor government securities have continued to fall as the Central Bank of Kenya rejects aggressively priced bids, with the highly liquid market also helping tame the interest rates. The interest rates on the 91, 182 and 364-day Treasury bills have fallen by between 1.5 and 2.32 percentage points apiece since the beginning of the year. On the 91-day paper this week, the rate decreased to 8.33% from 8.53%, the 182-day paper declined to 10.37% from 10.45 last week while the 364-day paper dropped to 11.72% from 11.75% the previous week.

Since the start of the year, the interbank rate has fallen from 6.75% to 3.782% and has trended below the CBR indicating relatively high levels of liquidity in the interbank market. The CBK has actively participated in the market through open market operations to reinforce availability and distribution of liquidity in the interbank money market. The MPC has retained the CBR at 11.5% in both of its meeting in the first quarter and opted not to revise the KBRR in January.

The Kenyan shilling

The Kenyan shilling gained further to trade at nine month levels of 100.57 shillings per US dollar but slightly lost ground against the Sterling pound. The local currency firmed against the US dollar due to support from inflows of hard currency from offshore investors, improved earnings from tea and horticulture and a reduction in import bill due to lower oil prices. Kenya forex reserves currently stand at a 15-month high of more than 760 billion shillings or $7.51 billion, equivalent to 4.96 months of import cover which can hence offer support incase of any short-term shocks.

The table below shows the top five market gainers:

See the table below of top five market losers:

The following table shows how the shilling performed against other currency this week as compared to last week:

Article by Amina Mbuthia.