Equities Market retreat in the first weekly Session- Genghis Research

All market indicators closed in the red in Monday’s trading session with the Nairobi All Share Index (NASI), edging 0.27 percent lower relative to Friday’s close. The NSE-20 Share and the NSE-25 Share Indices, reversing their hitherto upward trend, erased 0.61 percent and 0.30 percent respectively while Equity turnover narrowed 48.00 percent whilst shareholder wealth trimmed 0.27 percent during the session.

The A/D ratio, which is an unbiased measure of market breadth, closed at 0.75x tilting towards the decliners. The top gaining sector was the Real Estate Investment Trusts (REIT) Sector (+9.77%); bolstered by the share performance on its sole constituent counter Stanlib Fahari I-REIT (NSE: FAHR-I).

However, the counter’s fickle performance in recent sessions was exemplified by the 100 shares that traded on Monday. The Investment Services was the sector’s laggard, shedding 0.77 percent in the session, weighed down by the price erosion of Nairobi Securities Exchange (NSE: NSE) stock. The counter traded 29,600 shares valued at KES 381,840, attributed to retail demand and supply.

Foreign Investor’s Participation on Monday’s Trading

Foreign investors accounted for 72.96 percent of total turnover while local participation accounted for 27.04 percent.

Accumulative activities dominated the session with net inflows of 22.45 million shillings compared to net inflows of 18.79 million shillings recorded on Friday’s session.

With a turnover of 69.23 million shillings, Safaricom Ltd (NSE: SCOM), sturdily maintained its position as the day’s most traded stock representing 24.08 percent of total activity and 28.83 percent of foreign investor activity.

East African Breweries Ltd (NSE: EABL) followed suit, recording a turnover of 56.41 million shillings accounting for 17.24 percent of total market activity and 23.50 percent of foreign investor activity.

The day’s highest net inflows of 24.90 million shillings were logged by The Co-operative Bank of Kenya Ltd (NSE: COOP) whilst Diamond Trust Bank Kenya Ltd (NSE: DTK), registered the day’s highest net outflows of 10.70 million shillings.

Performance of the Shilling on Monday

The Kenyan shilling was weighed down in the first trading session in the week; retreating against six of the seven international and regional currencies.

Against the dollar, the local unit declined 0.14 percent to close the session at 103.70. The shilling eased on account of increased dollar demand from importers coupled with decreased foreign inflows.

The central bank was in the market to mop up excess liquidity to the tune of 14 billion shillings via open market operations.

Across the pond, the shilling retreated 0.72 percent and 0.19 percent against the pound and euro currencies respectively. The pound was uplifted on Monday ahead of upbeat economic releases to be announced in the course of the week.

Inflation and retail sales data for the month of January are expected to indicate better print, measured against the prior monthly figures. The euro was bolstered in the session as a quarterly economic report by the European Commission painted a rosy growth outlook for the individual nations.

The report revised upwards Eurozone growth forecasts to 1.60 percent and 1.80 percent in 2017 and 2018 respectively. On the regional front, the shilling shed a marginal 0.02 percent against the South African rand while held steady against the Ugandan shilling.