Foreign investors dominate bourse weekly trading activity

A positive week at the Nairobi Securities Exchange (NSE) saw foreigners reverse their three weeks of consecutive selling, becoming net buyers with net inflows worth Sh19 million.

They were responsible for 79.4 per cent of market activity, compared to 56.9 per cent the previous week, according to KCB Weekly Capital report.

The market was, however, on a downtrend during the week, as depicted by the key indices, with NSE All-Share Index and NSE 20 shedding 0.1 per cent and 0.2 per cent, respectively.

Among the large capitalised counters, Safaricom gained 0.6 per cent, while Equity, KCB and East African Breweries Ltd (EABL) shed 3.9 per cent, 3.5 per cent and 2.5 per cent, respectively.

Equities turnover rose 5.2 per cent to Sh2.2 billion, with Safaricom, Equity, Stanbic Holdings Plc, EABL and British American Tobacco, the five top traded counters, accounting for 85.2 per cent of total market turnover.

“Going into the week, activity is expected to be dominated by the key traded counters Safaricom, KCB and Equity, due to their liquidity traits,” said KCB Weekly Capital report.

Loan book

Banks continued to announce a decline in net profits in the third quarter of the year, with the dip attributed to a rise in loan loss provision.

This saw a rise in the cost of risk, and to “low restructuring levels despite a significant loan book exposure,” according to the report.

The Shilling depreciated 0.3 per cent against the dollar during the week, trading at Sh109.50.

Treasury bills were oversubscribed, with a subscription rate of 104.2 per cent, considerably less than an over-subscription of 126.6 per cent the previous week. The 364-day paper received most bids, at Sh12.9 billion as investors sought appropriate risk-adjusted returns, with the paper yielding 8.1 per cent annually.

The issuer received Sh25 billion worth of bids, accepting Sh24.2 billion, an acceptance rate of 96.6 per cent. Yields on all three papers rose during the week.

The Central Bank of Kenya re-opened two bond issues, seeking to raise Sh40 billion, with the period of sale for the auction running up till Tuesday last week.

The issuer received Sh56 billion worth of bids, accepting Sh53.7 billion, an acceptance rate of 96 per cent - at weighted average rates of 11.45 per cent and 13.25 per cent.