Weekly Market Roundup: The Equities and the Kenyan Shilling

On the 48th week of the year, the equities market posted poor performance as depicted by the market indices and the value of transactions.

The NSE All Share Index was on a downward trend, closing at 136.43 points from 137.4 points recorded the previous week. The NSE- 20 Share index closed similarly in the red, plunging by 0.55 percent to close at 3248.02 points whilst the NSE -25 Share Index declined by 1.44 percent to close at 3595.33 points.

Equity turnover was up by 46.61 percent to 2.79 billion shillings from 1.90 billion shillings. Shareholders wealth contracted by 0.70 percent to close at 1.977 trillion shillings from 1.991 trillion shillings.

Safaricom Limited (NSE: SCOM) has launched a new internet data plan which allows users to connect up to 10 devices. The new data plan dubbed “Easy50bundle” is targeting SMEs, offering customers up to 50 gigabytes of data at a cost of 6,000 shillings per month. This move is aimed at expanding its data market which has been a great contributor to its revenues (+46.3% to KES 13.4Bn).

Market summery

Most actively traded counters

Gaining stocks

Losing stocks

Kenyan Shilling Performance

The Kenyan shilling maintained a downward trend against its basket of currencies, as market sentiment was driven by announcement; rather than economic data.

The local currency weakened against five of its seven international and regional pairs. The USD/KES pair slumped by 0.74 percent, solidifying a new range of 101.80-.90, as the dollar continued to garner points against its own basket of currencies.

Mid-week the greenback rallied, finding support in the Q3 GDP revisions, while domestically Central Bank Governor Njoroge highlighted that the US Fed rate hike remained a threat and long-term investors were key to shielding the shilling.

The Central Bank of Kenya intervened in the market, in an attempt to correct liquidity asymmetry, injecting 4.2 billion shillings on Thursday and entering the market for 5 billion shillings on Friday (in reverse repos).

Across the pond, the EURK pair shed a significant 6.87 percent, despite the single area currency facing significantly turbulent times. Fears over the Italian referendum continued to plague the currency, with the possibility of a ‘Yes’ victory forcing Prime Minister Ronzi to resign and possibly resulting in eight banks collapsing; all of which are dependent on his bailout program.

The GBPKS illustrated a similar situation, with the shilling shedding a further 11.18 percent. The pounds’ aggressive rally was due to British Brexit Minister Davis Davis indicating London would consider making payments into the EU budget, in exchange for access to the European markets; thus, avoiding a ‘hard-Brexit’.

The rand remained this week’s largest gainer, recording a 23.25 percent increase against the Kenyan shilling. The rand was buoyed by Fitch & Moody’s refusal to downgrade the country from investment grade, while markets perceived Presidents Zuma’s hand would be weakened by the no-confidence on Thursday.