Secondary Turnover at the Stock Market Rejuvenates on Thursday

Secondary market turnover jumped to 2.95 billion shillings on Thursday’s session boosted by trades on the short-to-medium term space.

Most participants are biased towards the purchase side with few sellers on the long-end according to Genghis Capital.

Currently, the market is marked with a high bid-ask spread; an indication of market uncertainty. A repeal of the Section 33B, as proposed in the Finance Bill 2018, is seen as a catalyst for increased trading activity.

Liquidity in the market is high as investors adopt a wait-and-see approach. In addition, the budgetary cycle has veered off recent trends with:

1. recently enacted Appropriation Bill 2018
2. Provisional Collection of Taxes and Duties Order, 2018, already spurring government spending in the new fiscal year.

This has improved market liquidity with the average interbank rate dropping further to 3.30 percent.

“We expect subdued market activity as local investors continue to stay out of the market as we wrap up the week,” said Genghis Capital.

Foreign investor dominance is expected on Safaricom, Equity, KCB, and EABL. For Safaricom, economic analysts anticipate prices to remain within 28-28.50 shillings per share as the new resistance level and demand to outstrip supply.

EABL breached support level of 215.00 shillings Banking stocks had limited activity with Equity Group holding at a resistance level of 50.00 shillings.

Analysts anticipate EQTY to test 49.00 shillings level while KCB Group to oscillate around 47.50 shillings. A lower price on the latter may entice increased local participation.