Safaricom Sweeps 35% Of Thursday’s Turnover At The Bourse

Safaricom was the most traded stock, accounting for 35.2% of the day’s turnover. The counter’s price function weakened by 1.6% to KES 18.15 to close as the day’s worst-performing mover, largely driven by foreign investor exits.

Amongst the top mover banking stocks, Equity Group and I&M inched downwards by 0.1% and 0.6% to KES 35.25 and KES 48.35, respectively. On the other hand, KCB Group gravitated to a position of stability, remaining unchanged at KES 45.10.

EABL’s price function advanced by 2.7% to KES 183.75, closing as the day’s best-performing mover. Conversely, Jubilee remained unchanged at KES 200.00.

Unga Group was the session’s top gainer, rising 9.9% to KES 20.55. On the other hand, EA Cables dropped 9.8% to KES 2.68, making it the top loser of the day.

The market closed the day on a bearish note, with the NASI declining by 0.5%. In addition, the N10, NSE 20 and NSE 25 softened by 0.1% each.

Equity turnover declined by 7.6% to USD 4.5m. Local investors dominated market activity, accounting for 63.9% of the day’s turnover levels, up from 44.3% yesterday.

Foreign investors were bearish for the ninth time, with net outflows of USD 1.4m. Safaricom led the selling charge, while EABL led the buying charge.

Read Also: NSE Market Slumps As Foreign Investors Exit And CBK Eases Policy

Central Bank Rate

The Central Bank of Kenya’s Monetary Policy Committee (MPC) decided to lower the Central Bank Rate (CBR) by 50 basis points to 10.75% (the fourth consecutive cut) and reduce the Cash Reserve Ratio (CRR) by 100 basis points to 3.25% at its meeting on February 5, 2025. These decisions aim to stimulate economic activity by encouraging banks to lower lending rates and increase credit to the private sector. The MPC observed that while overall inflation remained below target and core inflation continued to decline, economic growth decelerated in 2024, necessitating an easing of monetary policy. As such, these measures are aimed at boosting growth while maintaining exchange rate stability.

The Committee’s decision was made against a backdrop of a recovering global economy, albeit with persistent uncertainties related to trade and geopolitics, and moderating but sticky inflation in advanced economies. While acknowledging positive indicators like a healthy current account balance and strong foreign exchange reserves, the MPC also noted the slowdown in economic growth. They emphasized the importance of banks passing on the benefits of the CBR and CRR reductions to borrowers by lowering lending rates, and reiterated their commitment to closely monitoring both domestic and global economic developments, standing ready to take further action as needed. Additionally, the CBK is leveraging on penalties as provided in the Business Laws (Amendment) Act 2024 to impose penalties on banks – which could be as high as 3X realized gain by banks – that fail to extend the interest rate relief to borrowers. The Central Bank Governor noted that 5 banks are already being subjected to an on-site inspection by the apex bank to ensure that the cost of funds aligns with the interest rates charged.

Read Also: Was The Decision By The Monetary Policy Committee A Balancing Act Or A Misstep?