Newly Listed Deacons East Africa Likely to Create More Shares

Equities

Market activity improved on Wednesday when compared to its previous slight slump. The NSE 20 Share index edged upwards for the second consecutive day this week to settle at 3479.73 points having been supported mainly by the recent Safaricom’s share price rally.

The NASI added 0.69 points to close the day at 145.29 points. The NSE 25 Share index was up by 11.07 points to level at 3972.54 points. Shareholders wealth expanded to KES 2092.629 from KES 2082.669 billion yesterday, whilst equity turnover increased to KES 0.86billion from KES 0.69 billion before owing to a rise in the number of shares traded. 

Listed fashion retailer Deacons East Africa is likely to authorise the creation of new shares as it seeks to revive its employee share ownership plan (Esop) in the coming weeks. The new entrant at the bourse has issued almost its entire stock of authorised shares, leaving the firm little room to distribute additional shares either to the Esop or to capital-raising ventures such as rights and bonus share issues.

The firm has issued 123,558,228 shares, equivalent to 99.96 per cent of its total authorised share capital of 123,600,000, leaving only 41,772 shares unalloted to shareholders. At the current price of KES 15 a share that would only amount to Sh627 million in value.

Currency

The Kenya shilling remained unchanged and steady against the US dollar on Wednesday owing to inflows from various companies which strengthened the local currency. The shilling weakened further against the Sterling and the Euro to end the day at KES 135.04 up from KES 133.84 previously as the Euro strengthened too to KES 113.26 from KES 113.69 yesterday. There are developing signs of certainty on Britain’s economy and its relationship with the rest of the world following the Brexit vote hence we may witness the Sterling’s and the Euro’s increasing gains against the Kenya shilling going forward.