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Secondary Turnover Retreated To Close At KES 2.2 Bn on Thursday

BY Soko Directory Team · February 1, 2019 07:02 am

Secondary market turnover retreated to close at 2.2 billion shillings as investors focused on the re-opened bonds which close on 5th Feb.

Turnover was driven by 5-year tenor and infrastructure bond trades. The longer-dated IFBs begun to see a downward shift in rates as demand pressures pushed them below the resistance level of 12 percent.

The market expectation around the re-opening for the 2-yr and 15-yr is currently at 10.50% -10.65% and 12.70 – 12.80 percent, respectively, with only 12 billion shillings on offer.

Price undercutting is expected on the 2-year issue which was trading at 10.40 percent before the announcement.

T-bills recorded an overall 167.39 percent subscription rate, uplifted by uptake of 364-day tenor from last week’s rejected primary bond bids.

CBK sat out of the repo market yesterday as KES liquidity continued to tighten with the overnight rate closing at 4.99 percent. The local unit closed at 100.8 still under moderate end-month pressure.

“As we enter the last trading session this week, we expect activity to remain on the index counters with foreign investors dominating the market as they persist an overall selling sentiment,” said analysts from Genghis Capital.

Investors noted increased trading on NIC on the back of additional information on the impending merger between the Group and CBA.

The counter traded 334,400 shares in the previous session, closing 15.98 percent higher than Wednesday’s session.

“We may see continued interest on the counter in today’s session especially from the local investor front similar to yesterday’s session where all the trades on the counter were executed by local investors,” they added.

January inflation came in at 4.70 percent y/y (5.71% y/y in Dec 2018) which was mainly attributed to a slight uptick in the food and non-alcoholic beverage basket.

Data by Kenya National Bureau of Statistics indicate that the food and non-alcoholic beverage group posted a 1.62 percent y/y (0.78% m/m) weighed down by downward price in cereals which account for c.30 percent of the 36.04 percent weighting.

Transport index declined 1.40 percent m/m on downward fuel pump price of petrol and diesel that was effected mid-month.

“Going forward, we expect inflation to remain within CBK target with food inflation moderating on excess supply while the current stable oil prices will steady fuel inflation,” said Genghis.

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