Poor Company Financial Results Push NSE to 51-Month Low

Equities

Trading activity started the week on a lower note compared to its Friday’s performance. The NSE 20 Share index dropped 16.09 points to close the day at 3508.49 points while the NASI remained flat at 138 points.

The NSE 25 Share index gained 6.80 points to end the day at 3846.75 points. Shareholders wealth slightly increased to KES 1996.477 billion from KES 1993.059 previously whilst equity turnover reduced to KES0.40 billion from KES 0.59 billion earlier owing to a decline in the number of shares traded.

The stock exchange has dropped to a 51-month low as major stocks continue to suffer from declining institutional investor purchases due to negative corporate announcements and post-Brexit foreigner selloffs. The NSE 20 Share Index year-to-date return now stands at a negative 13 per cent at 3,508 points, a level last seen in April 2012.

Market capitalization is down by KES 53.4 billion to KES 1.996 trillion since January. Before the Brexit vote, the NSE 20 Share Index was 7.3 per cent down on a year-to-date basis. The market has gone on to add a decline of six per cent in the four weeks since the vote.

Read: Kenyan Shilling Fails to Capitalize on Economic Data

Currencies

The Kenya shilling remained flat on Monday against the US dollar as market participants adopted a cautious approach owing to the Central Bank rate decision which set for today and on which we anticipate the rate to remain unchanged due to the steady economic environment.

The shilling gained further ground against the Sterling and the Euro as uncertainty on the performance of the British economy going forward persisted despite recent entry of a new Prime Minister.