[Graph in pdf]
Equities Market
Stocks weakened marginally in the third week of April, still held down by trade tariff uncertainties which we view will negatively impact inflations and economic growths across the globe. The local stocks still underperformed to recorded a 1.1% overall value loss as activities also slowed down. NSE 10 lost the most at 1.2% week on week (w-w) followed by NSE 25 and NSE 20 with losses of 0.9% and 0.8%, respectively.
Shares traded declined by half from 94.23Mn to 47.55MN shares to pull the value traded 40.6% down from KES 1,614.56Mn to KE S959.23Mn. This is despite the ongoing corporate actions that should support market activity.
Weekly foreign participation however improved from 42.9% to 51.2% with a reduction in net foreign inflows from KES 64.90Mn to KES 44.54Mn.
Sector performance saw banks retain top position after moving 17.20Mn shares valued at KES 572.86Mn. The telecommunication, manufacturing and the insurance sectors followed at second, third and fourth positions after changing hands 12.10Mn, 0.52Mn and 15.00Mn shares valued at KES 211.47Mn, KES 79.35Mn and KES 71.10Mn, respectively.
KCB Group emerged the week’s top mover after moving 11.20Mn shares valued at KES 431.60Mn as its price fell marginally at 0.1% from KES 38.30 to KES 38.25 per share. The counter experienced heavy foreign outflows of KES 169.94Mn after recording a foreign sales of 73.3% or KES 316.18Mn of its sale side transactions in relation to a 33.9% or KES 146.24Mn foreign of all the buy transactions. We retain a strong BUY recommendation on the Lender’s share price which has been recently impacted by low dividends and delayed NBK sale transaction.
Safaricom took second position after exchanging KES 211.47MN from 12.20Mn shares while its price sustained an additional 2.0% value loss from KES 17.65 to KES 17.30 per share. The telco witnessed high foreign activity of 82.3% average in a move seen to be a foreign book transfers, as 82.1% were foreign buys while 82.6% were foreign sales.
During the week, I&M Group and Stanbic Holdings closed their books on 16th April for the KES 1.70 and KES 18.90 final dividends whose book payment will happen on 22nd May and other dates to be announced respectively. As such, I&M lost 7.1% from KES 32.25 to KES 29.95 per share while Stanbic gained 4.5% from KES 165.75 to KES 173.25 per share respectively.
In the new week last week of April, we retain a keen focus on banks, especially on Equity Group and Diamond Trust Bank Kenya (DTBK) whose book closures are happening on 23rd April for the KES 7.00 and KES 4.25 final dividends respectively. We also advise entries on Safaricom (KES 17.30), BAT (KES 370.25) and Kengen(KES upon their discounter prices.
[Graph in pdf]
Bonds Market
Secondary bonds value traded declined 31.4% in week to change hands KES 44.54Bn compared to KES 64.90Bn despite a marginal decline in the number of deals from 897 to 884 transactions. This was mainly impacted by re-opening of three papers in the primary market.
IFB1/2024/8.5 (7.3-years to maturity) emerged the most traded paper as its value improved after its yield declined 14.5bps from 13.3893% to 13.2442%.
In the coming new week, we expect demand to remain suppressed as investors weigh in on taking positions in the ongoing primary.
The primary market saw the National Treasury re-open three papers, FXD1/2022/15, FXD1/2022/\25 and FXD1/2012/20, targeting KES 70 billion from two auctions. The first auction is scheduled for 30th May 2025 for FXD1/2022/15 of Coupon 13.942% and FXD1/2022/25 of coupon 14.188% while the second auction will happen on 7th May 2024 for FXD1/2012/20 (12.000% coupon).
[Graph in pdf]
Yield Curve
NSE yield curve experienced mixed reactions in the week with the short-end remaining stable as focus shifted to the reo-opened papers. The middle curve shifted marginally down and as the long end shifted up on effect of the above primary re-openings.
In last week of April, we expect the middle to the long-end to remain relatively stable on impact on resistance from the rate cuts and as investors push for better bidding rates in the primary.
[Graph in pdf]
Interbank
Overall interbank rate narrowed marginally at 15.7bps w-w from 9.99% to 9.83% to pull down the average rate 50.5bps from 10.37% the week before to an average of 9.86%. This was mainly brought down by downward policy review in both the Central Bank Rate (CBR) and the interbank volatility range from 300.0bps to 75.0bps discount window above the CBR.
Bank excess liquidity dipped 35.7% from KES 18.2Bn to KES 11.70Bn on effect from bonds value payments that seem to have drained liquidity.
[Graph in pdf]
Treasury Bills
Weekly Treasury bills auction were oversubscribed at 160.1% or KES 38.42Bn against a KES 24.00Bn target, while the government accepting KES 36.36Bn or a 151.5R performance. The auction was heavily supported by rollover redemptions of KES 29.76Bn that will happen on the auc0tion’s value date, 22nd April 2025.
Investor attention remained on the 364-day paper which received 71.7% or KES 27.53Bn of the amount subscribed. We attribute this to its high return of 10.0712% as opposed to the other two papers whose returns are below 8.5%.
In the coming week, we anticipate oversubscriptions to remain present supported by the KES 41.35Bn maturing on 28th April 2025 even as rates continue narrowing down marginally.
[Graph in pdf]
Currency
The shilling lost in the week against some major currencies, shedding 0.4%, 1.5%, 0.5% and 0.4% against the US dollar, the British pound, the euro and the Japanese yen. The weakening is largely attributed to uncertainties from the US led tariff which favor capital flights especially to the US.
Forex reserves however remain strong at USD 9,808 sufficient for about 5-months of import cover. This is after improving by 0.8% in the week from USD 9,729MN to USD 9,808Mn on what we view as improved remittances in then week.
