CBK Hikes Benchmark Rate By 50bps To 13%

The market closed the session in the red as reflected by the benchmark indices performance. The N10 and the NSE 25 shed 0.1% each while the NASI shed 0.7%. The NSE 20 remained largely unchanged for the second consecutive session.

Equity turnover edged downwards to USD 0.6m (-75.7%) with foreign investors dominating market activity at participation levels of 60.2% down from 77.5% in the prior session.

Equity Group was the day’s top mover, accounting for c. 43.8% of the activity levels. The counter shed 0.1% to KES 38.20 on foreign trading. KCB Group on the other hand gained 1.2% to KES 20.45 while I&M remained unchanged at KES 17.50.

Sasini was a surprise top mover on a KES 6.2m turnover print. The counter gained 1.9% to KES 21.95.

EABL continued on its recovery for the seventh session gaining 0.7% in the day to KES 115.75 – on foreign buying.

EA Cables was the day’s top gainer on a 3.3% rally to KES 0.93 while NBV shed 6.5% to KES 2.30 – closing as the leading laggard.

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Foreign investors remained bearish printing net outflows of USD 13.2K. Safaricom led the selling charge while EABL led the buying charge – both for the second consecutive session.

NSE has received approval to operationalize a hybrid fixed-income market that combines both onscreen and over-the-counter (OTC) trading.

The NSE is set to operationalize a hybrid fixed-income market following the approval of amendments to its fixed-income trading rules by the CMA – enabling the NSE to offer a secondary market that combines both onscreen and OTC trading of fixed-income securities.

The hybrid model will improve pre-trade transparency through the introduction of a quotations board. The NSE also plans to launch a real-time daily yield curve that factors in the activities of the quotations board as well as the trades executed in the market.

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KenGen commissions a feasibility study on the possibility of generating power from geothermal brine – a plus in increasing its renewable energy capacity. We opine that this channel if found viable, will be a double barrel that will see a growth in revenues and carbon credits alike and tailwind the company’s ambitious expansion plan to inject c. 2.5GW into the grid by 2030. Currently, the company’s installed capacity is 1,904MW – c. 60.3% of the 3,165MW installed capacity in Kenya.

The Central Bank of Kenya Monetary Policy Committee (MPC) met on Tuesday, 7th February 2024, and decided to raise the Central Bank Rate (CBR) by 50bps to 13.0% from 12.5%, following a 200bps hike in the previous sitting. The committee cited the continued need to stabilize FX rates and ensure the effective anchoring of inflationary pressures, to guide inflation towards a mid-point target of 5% on a sustained downward trajectory.

Additionally, the committee acknowledged the reduction in the ratio of Non-Performing Loans (NPLs) within the banking sector, declining to 14.8% in December from 15.3% in October 2023. The committee will reconvene in April 2024 to review and adjust the base rate accordingly.

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