Equity Market

  • The all-inclusive NASI share price index decreased by 4.78% from 134.86 to 128.41 during the week ending September 30. The NASI share price index decreased by 6.61% from 137.50 as at 31 August 2022 to 128.41 as at September 30, 2022.
  • The NSE 20 share price index decreased by 1.62% from 1746.03 to 1717.68 during the week ending September 30. The NSE 20 share price index decreased by 1.91% from 1751.20 as at 31 August 2022 to 1717.68 as at September 30, 2022.
  • The NSE 25 share price index decreased marginally by 2.83% from 3,192.29 to 3,102.05 during the week ending   September 30. The NSE 25 share price index decreased by 4.68% from 3254.20 as at 31 August 2022 to 3102.05 as at September 30,2022.
  • Market capitalization decreased from KES 2.102 trillion to KES 2.001 trillion in the week ended September 30.This was in line with NASI index that tracks the performance of the whole market. It is worthy to note that Safaricom Plc market capitalization (Ksh 1.098 trillion) currently accounts for 52.24% of NSE market capitalization.
  • Market capitalization decreased by 6.58% from KES 2.142 Trillion as at 31 August 2022 to 2.001 trillion as at 30 September 2022.
  • Market capitalization increased by 3.20% in the third quarter of 2022 from KES 1.939 Trillion as at 30 June 2022 to KES 2.001 trillion for period ended 30 September 2022.
  • Equity turnover for the month ended 30 September 2022 amounted to Ksh 9.39 billion a increase of 76.17% from a total equity turnover of Ksh 5.33 billion reported for the month of August  2022.
  • Value of shares traded for the third quarter of 2022 amounted to KES 22.69Bn compared to KES 26.24Bn in the second quarter of 2022. Local institutional investors are increasingly divesting from shares in an attempt to reduce to effect of volatile share returns.
CORPORATE ACTIONS
COUNTERCORPORATE ACTIONDECLAREDBOOKS CLOSURE DATEPAYMENT DATE
Jubilee HoldingsInterim   DividendKES  1.0009-Sep-202211-Oct-2022
NCBAInterim   DividendKES  2.0015-Sep-202230-Sep-2022
EABLFinal  DividendKES  7.2515-Sep-202230-Oct-2022
BOC KenyaInterim   DividendKES  1.6030-Sep-202222-Oct-2022
Centum InvestmentFinal  DividendKES  0.58730-Sep-2022Not Disclosed

CORPORATE ANNOUNCEMENTS AND KEY EVENTS FOR THE LAST WEEK AND CURRENT WEEK

  • In the Treasury bills auction of September 29, the government sought to raise KES 24 billion but received bids totalling KES 9.31 billion representing a performance of 38.80% percent. Amount accepted amount to KES 6.65 billion compared to KES 10.09 billion last week.  Interest rate on 91-Day Treasury bill, 182-Day Treasury Bill and 364-Day Treasury bill was 8.952%, 9.631% and 9.905% respectively. The subscription rates across the three papers were 128.24%, 30.49% and 11.34% respectively.
  • During the month of September 2022, the Central Bank of Kenya offered for sale Treasury Bills worth KES 110 billion. Bids received for the month of September 2022, totalled KES 111.40 representing an overall subscription rate of 101.27%. The CBK only accepted KES 83.21 billion of bid submitted and rejected the rest of the bids clearly indicating the resolve of the Central          Bank of Kenya to reject expensive bids. Return for Treasury bills averaged 8.819% for month of September 2022.
  • The bond market reported increased activity with bonds worth KES 15.00Bn transacted compared to KES 13.90Bn registered the previous week.
  • During the month of September 2022, value of bonds traded in the secondary market totalled KES 65.75 Billion compared to KES 68.4 Billion traded in the month of August 2022.
  • Value of bonds traded for the third quarter of 2022 amounted to KES 195.7Bn compared to KES 194.0Bn in the second quarter of 2022. Local institutional investors are increasingly investing in bonds in an attempt to achieve better returns as compared to volatility experienced for equities.
  • In the third quarter of 2022, the government reopened seven bonds and issued one infrastructure bond on tap sale seeking to raise KES 160.00 billion. The bonds were undersubscribed receiving bids of KES 112.20 billion against the offered KES 160.00 billion, translating to a subscription rate of 70.13%. The government was keen to maintain low rates, accepting only KES 93.30 billion, translating to an acceptance rate of 83.16%.
  • The Central Bank of Kenya sought to raise KES 50 billion by auction of two reopened bonds FXD1/2022/10 and FXD1/2022/15 in the month of September 2022. Bids received for the bonds amounted to KES 46.13 billion representing a 92.26% of which the CBK accepted KES 39.03 billion representing an acceptance rate of 84.61% clearly indicating the resolve of the CBK to lower government borrowing costs. The average interest rate for bonds reopened in September 2022 was 13.965%.
  •  The National Treasury plans to raise KES 60 Billion from auction of two reopened bonds FXD1/2017/10-(4.9 years) and FXD1/2020/15-(12.3 years) and a new bond FXD1/2022/25-(25.0 years) in October 2022 in two tranches. The reopened bonds FXD1/2017/10-(4.9 years) and FXD1/2020/15-(12.3 years) are currently paying interest of 12.966% and 12.756% respectively while for new bond interest will be market determined. The Period of sale for bond FXD1/2017/10 AND FXD1/2020/15 is from 21 September 2022 to 04 October 2022. The Period of sale for bond FXD1/2022/25 is from 21 September 2022 to 18 October 2022.
  •    Foreign lenders will be free to buy up to 40 percent of existing banks in Ethiopia. They will be at liberty to set up 100% fully owned foreign subsidiaries if they so wish. This becomes effective in the 6 months to 12 months after the guidelines guiding the same are out. This is a positive development as Kenyan banks like KCB and Equity have been eyeing venturing into Ethiopia for a long period of time.
  •    President William Samoei Ruto appointed his cabinet secretaries during the week. Among the Notable appointments is the nomination of Professor Njuguna Ndungu as the cabinet secretary Treasury and planning. He was the central bank governor during President Kibaki regime which was legendary for economic and institutional reforms during the period that saw Kenya run a lean government that financed its operations internally. This is reassuring given current scenario in the economy where we are indebted to the tune of KES 8.6 trillion. Another notable nomination is KenGen CEO appointment as the CS for EAC, arid and Semi-arid lands. This breeds uncertainty in KenGen share price though given how the CEO has managed KenGen well during her tenure.
  •    Four million loan defaulters are set to be removed from CRB list. This follows the Kenyan government move to champion a shift to a credit score as a basis of assessing credit risk rather than current scenario whereby balck listing in the CRB denies one access to credit.
  •     Billionaire John Kimani Kimbunga, the largest individual shareholder in Kakuzi has purchased an extra 431,434 Kakuzi during the first 8 months of 2022 bringing his total ownership to 6.77 million shares (34.54 percent stake) from 6.34 million shares held as at 31 December 2022. John has permission from the Capital Markets Authority to buy up to 40 percent stake in the Company.
  •    Rubis Energy Kenya has disclosed that the fuel supply hitches earlier this year, which forced the closure of small independent players helped to boost its sales by 65 percent in the six months to June, revealing the gain that large marketers who could access the product enjoyed in the period. This is positive for listed oil marketer Total Kenya which benefited too from the closure.
  •    Safaricom, NCBA and KCB in a joint press conference held in Norfolk Hotel agreed to slash charges on Fuliza for between 10% to 50%. This is a positive development for financial inclusion in Kenya and can be seen as a response to Faraja a product launched by Equity Group Holdings that could see customers access up to KES 100,000 to help facilitate across various shopping sites.
  •     As per quarter four data released by the Communication Authority of Kenya, mobile money subscriptions stood at 37.22 million for period 1 April to 30 June 2022.The number of mobile money agents stood at 301,890 for the period an increase of 2.83% compared to 293,589 for period 1 January to 31 March 2022.
  •   As per CBK data, total money handled by mobile money agents totalled KES 677.36 billion for August 2022 ( a 15.49% as compared to KES 548.52 billion reported in August 2021), a decline of 6.25% from KES 722.52 billion handled in July 2022. Active mobile money subscriptions stood at 70.06 million in August 2022 from 71.58 million in July 2022. Mobile money agents increased from 309856 in July 2022 to 310450 in August 2022.
  •     The Central Bank of Kenya paid a dividend of KES 4 Bn to the National Treasury for period ended 30 June 2022. This was in line with sections 9 and 51 of the CBK Act.
  •     According to the Auditor General, the costs of running National Social Security Fund for period ended 30 June 2021 breached the NSSF Act 2013 which fixed the operating expenses at no more than 1.5 percent of ASSETS managed by the NSSF. NSSF assets grew by 13.8 percent to KES 284.5Bn for review period, meaning operational expenses should not have exceeded KES 4.27Bn. Operating expenses for NSSF totalled KES 6.36 billion in the period under review against KES 5.4Bn in 2020. Total NSSF contributions were KES 14.4Bn in 2021 against KES 14.7Bn a year earlier.
  •    The government was seeking to leverage Safaricom infrastructure to disburse KES 50 billion dubbed   as the Hustlers fund. The government wants to take advantage of Safaricom wide reach to fulfil its campaign promise of giving loans to small businesses to revitalise their operations. The fund will be scaled up by a further KES 50 billion each year for next five years.
  •     During the week President Ruto ordered the National Treasury to work with ministries to cut KES 300Bn from 2022/23 budget to make it sustainable. This is a welcome move given that our government spending has far exceeded our tax revenues translating to a near KES 1 trillion increase in our national debt annually. The reduction in spending will go a long way in reducing our huge deficit which stands at KES 900Bn currently. Furthermore it reduces pressure on the National Treasury to seek for financing which will ultimately a reduction on government borrowing rates moving forward.
  •  The Central Bank of Kenya Monetary Policy Committee (MPC) raised the Central Bank Rate (CBR) by 75 basis points (0.75%) to 8.25% from 7.50%. This was a prudent move given current inflation rate that stood at 9.2% for month of September 2022 and increasing depreciation of the KES against the US dollar.  Decisive action had to be taken to tame inflation and to catch up with other Central Banks which have hiked their key refinancing rates.

LOCAL MARKET SUMMARY FOR WEEK ENDED 30 SEPTEMBER 2022

DetailsLAST PRICE 30/09/2022LAST PRICE 23/09/2022W-O-W CHANGE%
NSE 20 Index1717.681746.03-1.62%
NSE 25 Index3102.053192.29-2.83%
All Shares Index128.41134.86-4.78%
Equity Turnover in KES Billion1.502.49-39.76%
NSE Market Capitalization in KES Trillion2.0012.101-4.76%
Volume of Shares Traded in Million56.6085.70-33.96%
Bond Turnover in KES Billion15.0013.907.91%
USD/KES120.7324120.56000.14%
Murban Crude Oil (USD/BBL.) (29/09/2022)88.5492.48-4.26%
KENYA 2Y Treasury Bond Yield11.34211.3390.03%
KENYA 10Y Treasury Bond Yield14.18914.1130.54%