The Market Outlook: Expectations in Wednesday’s Trading at the NSE

Fixed Income

Secondary market turnover came off marginally to 2.5 billion shillings in Tuesday’s trading session with activity still predominantly on the medium-long term tenors and infrastructure bonds (IFBs). Genghis saysb that the market will continue to see foreign investor exits on the IFBs due to currency coming under pressure.

Liquidity remained tight forcing some investors to offload securities for funding purposes. As the trading enters the second part of the week, attention is expected to shift to the upcoming primary issue of the FXD2/2007/15, with initial market expectations on the bid yields starting at 13.50 percent which is the coupon on the paper. Fund managers continue to play on the sale side as the reporting period coming to an end.

Corporate News:

Tullow Oil has announced discovery of oil at Erut-1 well in Turkana Kenya that it estimates has an overall column width ranging between 100 to 125 meters. Following the discovery, Tullow plans to undertake more drilling having estimated that its allocated drilling blocks in Kenya has an estimated 750 million barrels of recoverable reserves.

The company plans to start producing approximately 2,000 barrels of crude oil per day for initial small-scale exports by June this year. The announcement follows Tullow’s announcement that it has exited exploration in Uganda to solely focus on Kenya

Trading Expectation:

Market turnover closed 447 million shillings against 104 million shillings recorded on Monday. Foreign participation showed a slight improvement to 77 percent from 74 percent witnessed on Monday.

British American Tobacco Kenya Ltd (NSE: BAT) was the highest traded counter with net foreign buying interest. Safaricom Ltd (NSE: SCOM) came in second while Equity Group Holdings Ltd (NSE: EQTY) occupied third slot. Genghis says that it expects high gear in market trading on account of continued foreigners’ dominance of the market.

The information in this article came from Genghis Capital Limited