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Safaricom Was Thursday’s Top Mover, Accounting For 51.6% But Its Share Price Still Falling

BY Standard Investment Bank · October 27, 2023 08:10 am

All the benchmark indices sustained their bear run for the fourth consecutive day. The NSE 20 and NSE 25 each retreated 0.5% while the NASI and N10 dropped 0.3%, and 0.6%, respectively.

Market activity rose 8.0% to USD 1.1m as local investor participation rose to 64.4% from 49.3% in the prior session.

Safaricom was the day’s top mover, accounting for 51.6% of the day’s turnover print. The stock shed 0.4% to close at KES 12.45 on foreign selling, extending its nine-year decline.

Kakuzi was a surprise top mover, trading 4.3k shares at a volume-weighted price of KES 386.00. The stock shed 4.7% in the day on foreign selling.

NMG was another surprise top mover trading 3.0m shares – with the share price remaining unchanged at KES 20.00 on local trading. This trade follows a profit warning issued today.

Of the top-traded banking stocks, Equity Group and KCB Group shed 1.2% and 1.8% to close at KES 37.50 and KES 19.15 respectively. I&M, on the other hand, remained unchanged at KES 17.50.

Longhorn led the day’s top losers on an 8.1% decline to KES 2.16 with Umeme leading the top gainers on a 9.5% rally to KES 14.95.

Foreign net flows foreign turned net sellers in the day printing outflows of USD 176.9k. Safaricom led the selling charge, posting net outflows of USD 178.7k while Equity Group led the buying charge posting net inflows of USD 14.6k.

In the news, Nation Media Group issued a profit warning for the financial year ending 31st December 2023. The company issued a profit warning dated 24 October 2023 indicating that the earnings for the financial year ending 31st December 2023 are projected to be lower than the previous year by at least 25.0%.

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This is on the back of inflationary pressures, depreciating shilling, rising interest rates, and higher taxes that have caused depressed consumer spending and increased costs of doing business.

The bourse market capitalization extended its slide for the ninth consecutive session to close the day down 0.3% from the previous session to KES 1,399.7bn – the lowest since 4th February 2013.

From our vantage point, we attribute this to the price erosion in key blue chips (mainly Safaricom and KCB) within the year driven by investor sentiments on the tight global macro-economic environment, the evolving geopolitics, and their potential ripple effects into geo-economics resulting in the heavy discounting witnessed – that’s somewhat deviated from fundamentals.

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