“This week we issue a BUY recommendation on NCBA Group. We remain positive on the firm’s earnings growth trend as well as its strategic venture into bancassurance with the acquisition of a controlling stake in AIG Kenya Insurance Co,” said Genghis Capital.
The select SSA markets closed the third quarter of 2023 on a net bullish position. Egypt was the best-performing market printing a year-to-date gain of 38.4%. Kenya, on the other hand, closed the quarter as the laggard, shedding 25.3% YTD.
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Bearish market sentiments prevailed in the week, as signaled by the NASI and NSE-20 indices w/w performance. Total market turnover declined by 55.9% w/w to KES 0.58Bn, down from KES 1.31Bn in the previous week.
Foreigners’ trading activity similarly decreased by 82.4% to KES 140.1Mn during the week. By and large, foreign investors remained bearish across key blue chips – printing overall net outflows totaling KES 89.01Mn.
Secondary fixed income market turnover jumped 6% w/w to KES 48.3Bn from KES 15.4Bn in the previous week. The bulk of the trading activity was skewed towards long-dated IFB issues.
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The highlight of the week was the results of the September 2023 Tap Sale Auction. The tap sale featured the extension of the FXD1/2023/002 and the FXD1/2016/010.
Average market yields for both papers as per the previous primary auction stood at 17.4537% and 17.9266% respectively. Out of the KES 15Bn sought, the Treasury raised KES 3.45Bn – representing a performance rate of 23%. Out of this, the Exchequer accepted bids totaling KES 3.37Bn.
Investors largely kept off last week’s auction as they awaited fresh issues this October. Coupon rates for these papers stand at 16.9723% for the FXD1/2023/002 paper and 15.039% for the reopened FXD1/2016/010. Discount securities recorded a performance rate of 56.9%, down from 84.07% the previous week.
The 91-day T-Bill registered an acceptance rate of 30% in the week raising KES 3.30Bn. Overall, spot markets accepted yields eased by an average of 4bps w/w across all papers. The average of accepted yields on 91-day, 182-day, and 364-day papers stood at 14.8206%, 14.9499% and 15.0544% respectively.
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