CBK Hikes Benchmark Rate By 50bps To 13%

Soko Directory Team

2 years ago

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.

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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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.