Secondary Market Turnover Quadruples on Monday

Secondary market turnover nearly quadrupled in Monday’s session, perching at 4.65 billion shillings.

The increased activity was driven by trades in the 3 – 5 years space and infrastructure bonds with coupons of 12.50 percent.

Notably, yields have been on a downtrend across the board with purchases at a premium and sales at a discount.

“We expect continued activity in today’s session to be dominated by the short-term papers and the infrastructure bonds. Sell buyback transactions amounted to 501.50 million shillings, 10.79 percent of the day’s turnover,” said analysts from Genghis Capital.

Interbank rate edged lower to 6.1457 percent on volumes of 18.53 billion shillings from 30.97 billion shillings recorded in the previous session. This was despite a net liquidity reduction of 7.90 billion shillings due to the settlement of last week’s T-Bills.

The Shilling lost ground marginally to close at 101.00 against the US dollar and we expect range-bound trading in today’s session.

Equities turnover slumped 63.52 percent on Monday to close at 189.47 million shillings. Most institutional investors sat out as local participants, mainly retail, accounted for 66.12 percent of total market turnover.

Heavy trading activity was recorded on Safaricom Ltd (NSE: SCOM), Barclays Bank of Kenya (NSE: BBK), Kenya Power & Lighting (NSE: KPLC) and Britam Holdings (NSE: BRIT) with share prices largely remaining mute. Safaricom is still facing some resistance at KES 32.50 level.

“We still expect local institutional investors to remain on the sidelines in today’s session,” said Genghis.