Home2020March 2020 - The Trading Room

Absa FY 2019 Normalized Profit after tax up 15% to Kes 8.5 billion

The Bank costs were well managed at Kshs17.3 billion reflecting a 1% increase year on year largely because of spend discipline and cost saves initiatives. The cost saves initiatives included automation of the processing centres, investment in alternative channels and branch rationalization programs. The savings derived were used to fund sustainable investments especially in automation and digitization.

Equity Group Net Earnings Up 14% to Kes 22.6 Billion, Dividend Increased 25pc

The Group continued to maintain an agile balance sheet with a liquidity of 52.1%, a loan deposit ratio of 75.9% and a core capital to risk weighted asset ratio of 19.8%. The balance sheet reflects solid diversified funding with customer deposits constituting 72% of the total funding, shareholders and long-term borrowing contributing 17% and 8% respectively. Net loans constituted 54% of the total assets while government securities and cash and cash equivalents contributed 26% and 13% of the total asset allocation respectively.

Investment strategies during Economic and Environmental Uncertainty

The whole world is on the watch. So many things seem to be happening at the same time and many people are in panic. The fear of COVID19 has forced many businesses to a temporarily closure – especially those involved in international trade. Businesses that depend on importation have been stunted and the uncertainty of when things will be stable again has caused a level of frenzy. To worsen things, the foreign exchange market has...

Morning Note: Grim Outlook, Uncertainties Tighten Grip on Markets

Data from the NSE shows the dividends as a percentage of share price (dividend yields) for 18 listed firms range between 7.3 and 19.7 percent, having gone up as the share prices fell in the past two weeks. The government is paying 7.3 percent for the risk free three-month Treasury bill, 8.2 percent for the six-month and 9.3 percent for the one-year paper. Investors in the stock market earn a return on capital when share prices go up, better known as capital gains, or through dividend payouts.

Market Report: 18 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 35,255,300 shares in 1,061 deals, corresponding to a market value of KES 1,236,498,914.00, were traded. Compared with the previous NSE trading day (Tuesday, March 17), today’s data shows 129% improvement in volume, 215% improvement in turnover, and 10% improvement in deals. The current NSE market capitalization is KES 2.03 trillion. In the aggregate, 42 NSE listed equities participated in...

Capital Markets Operations to Continue Normally Despite COVID-19 in Kenya – CMA

In line with the mandate of ensuring an orderly, fair and efficient market as well as protection of investors, the capital markets industry is working jointly to ensure that market activities continue normally as Kenya copes with the devastating effects COVID-19 is having on the global economy and after the confirmation of a few known cases in the country reported to date. The Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), Central Depository and Settlement...

Morning Note: Recession is Here.

Trading on Philippines Stock Exchange will resume on march 19th after the country temporarily halted trading on all Capital markets instruments yesterday. The finance minister in a statement, told investors not to worry on the lockdown of Capital Market instruments. There was talk towards the end of last year about recession, but it didn’t happen. Not so now. Goldman Sachs and Morgan Stanley economists joined the rush on Wall Street to declare that the coronavirus...

Market Report: 17 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 15,370,400 shares in 965 deals, corresponding to a market value of KES 393,005,199.00, were traded. Compared with the previous NSE trading day (Monday, March 16), today’s data shows 71% decline in volume, 73% decline in turnover, and 17% decline in deals. The current NSE market capitalization is KES 2.03 trillion. In the aggregate, 42 NSE listed equities participated in...

Hong Kong stocks below liquidation value, shows fear of recession

A month into one of the fastest global market meltdowns in recent history, investors aren’t willing to pay more than liquidation value for stocks in Hong Kong. The 50-member Hang Seng Index now trades at 99% of book value, a level only seen twice before in data compiled by Bloomberg going back to 1993. That means traders are pricing firms’ assets at less than their stated worth, something that last happened in 2016. The gauge...

Morning Note: Bear & Virus Work together, devour a Decade Long Bull.

The first quarter of the year and the market is taking one of the greatest hit of all time. Bringing the reminiscence of the 1987 and the 2008 crash. Global markets started their week with a continued sell off, one of their worst in recent times. The sell off continued even with Central Banks across the world taking the last shots of amo to save the global economy which is now evident is in a...

Polycarp Igathe Back to Equity Bank as Group Chief Commercial Officer

Equity Group Holdings Plc has announced that Polycarp Igathe has re-joined the Equity Executive team as the Group Chief Commercial Officer reporting to the Group CEO. Before returning to Vivo in 2019, Polycarp was the Managing Director of Equity Bank (Kenya)Limited and also doubled up as the Chief Commercial Officer. Polycarp resigned from Vivo last week in an exit termed as unexpected by market participants. Under the new Equity brand, Mr. Igathe will execute a...

Safaricom waives M-Pesa fees gets Regulator nod to lift Transaction Limits

Kenya’s largest telecoms operator Safaricom said on Monday it will waive transaction costs on mobile money transfers under Kes 1,000 shillings after President Uhuru Kenyatta encouraged the use of cashless payments to curb the spread of the coronavirus since it would cut down on the handling of cash. The M-Pesa mobile money platform is widely used, with more than 20 million subscribers in a population of 47 million. The Central Bank of Kenya has also approved...

Market Report: 16 March, 2020

At the end of the first weekday of trading on the Nairobi Securities Exchange (NSE) this week. A total of 53,897,700 shares in 1,167 deals, corresponding to a market value of KES 1,472,483,916.00, were traded. Compared with the previous NSE trading day (Friday, March 13), today’s data shows 27% improvement in volume, 25% improvement in turnover, but 36% decline in deals. The current NSE market capitalization is KES 2.0 trillion. In the aggregate, 41 NSE...

South Africa’s Benchmark Index Drops Most in Six Years.

South Africa’s benchmark stock index plummeted to the lowest in more than six years after President Cyril Ramaphosa’s declaration of a national state of disaster over the coronavirus outbreak stoked investor concern about its impact on an already fragile economy. The president announced tough measures Sunday to stem the spread of the virus locally, including halting flights and shutting schools, and said the government was finalizing a crisis package. An emergency cut in the U.S....

NSE to issue Remote Access guidelines to Brokers.

The corona virus is putting remote work to a gigantic test, and at a totally unprecedented scale. As the president announced this afternoon of an increase in the number of cases of the deadly COVID-19 pandemic in the country, he also advised companies to allow their employees to work remotely outside the office; except for essential service employees. To that effect, the Nairobi Securities Exchange has advised trading participants that it is open and will...

Bill Gates Exits Microsoft, Berkshire Boards

Microsoft announced on Friday that it’s co-founder Bill Gates is leaving the board, effective Friday. Gates is also stepping down from his position on the board of Warren Buffet’s Berkshire Hathaway. “I have made the decision to step down from both of the public boards on which I serve – Microsoft and Berkshire Hathaway – to dedicate more time to philanthropic priorities including global health and development, education, and my increasing engagement in tackling climate...

Market Report: 13 March, 2020

At the end of the last weekday of trading on the Nairobi Securities Exchange (NSE) this week. A total of 42,501,100 shares in 1,834 deals, corresponding to a market value of KES 1,178,386,193.00, were traded. The closed the day with a market capitalization is KES 2.04 trillion. Compared with the previous NSE trading day, today’s data shows 33% decline in volume, 36% decline in turnover, but 19% improvement in deals. In the aggregate, 49 NSE listed...

Morning Note: It’s a Crash! Oil,Virus wipe $11 Trn off Global Equities.

Global markets have officially entered into a bear run. In what couldn’t have been worse, the New York Stock Exchange had trading halted for the second day running after the S&P 500 index fell more than 7%, triggering a market halt. During the day’s wild trading session, the Dow Jones Industrial Average (DJIA) dropped by just under 10% in what was the largest single-day percentage decline since the stock market crash in 1987. The market...

South African Markets Crash as Johannesburg Stocks Fall Most Since 1997

South Africa’s benchmark stock index plunged the most since the market crash of October 1997 as markets globally continued to react to US measures aimed at curbing the spread of the coronavirus  which has accelerated the sell-off sweeping through global equities. The FTSE/JSE Africa All Share Index sank as much as 9.3% as of 3:34 p.m. in Johannesburg. Naspers, South Africa’s biggest stock, fell 7.1% to weigh heaviest on the overall market. Mining stocks plummeted...

Market Report 12 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A  total of 63,060,600 shares in 1,536 deals, corresponding to a market value of KES 1,848,500,206.00, were traded. Compared to the previous NSE trading day (Wednesday, March 11), today’s data shows 281% improvement in volume, 315% improvement in turnover, and 87% improvement in deals. The current NSE market capitalization is KES 2.15 trillion. In the aggregate, 45 NSE listed equities participated in...

Market Report 11 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 16,562,600 shares in 821 deals, corresponding to a market value of KES 445,212,612.00, were traded. Compared with the previous NSE trading day (Tuesday, March 10), today’s data shows 44% decline in volume, 42% decline in turnover, and 7% decline in deals. The current NSE market capitalization is KES 2.26 trillion. In the aggregate, 45 NSE listed equities participated in...

Market Report 10 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 29,805,100 shares in 887 deals, corresponding to a market value of KES 773,816,976.00, were traded. Compared with the previous NSE trading day (Monday, March 9), today’s data shows 21% decline in volume, 36% decline in turnover, and 25% decline in deals. The current NSE market capitalization is KES 2.26 trillion. In the aggregate, 43 NSE listed equities participated in...

Morning Note: Market Crash! The Chaos of Oil & the Virus.

Financial markets globally yesterday had their worst day as markets opened lower and ‘messier’. This is after Oil prices cratered more than 20% on Monday following Saudi Arabia’s surprising decision over the weekend to slash prices. At one point Sunday evening, crude oil futures were down about 40%. Yesterday, the NSE share indices had one of the worst hit since the 2008 financial crisis which was coupled by a post-election violence. The benchmark NSE All...

Morning Note: There’s a new problem in Markets, Oil Price Wars!

The Corona Virus scare hit the NSE hard two weeks ago when the index touched its lowest in 16 years. Just as the NSE is starting to recover, guess what? Global Oil Wars are coming hard on markets today. This is after Saudi Arabia slashed oil prices and throwing global economies into a new wave of uncertainties after OPEC talks collapsed. As the NSE opens today, we could see the only oil stock, Total Kenya...

The mother-of-all oil market busts is here: Say what? 28% decline at open?

The mother of all busts is unfolding in the oil market. WTI crude is already down 37% since the January high and it’s about to get much worse. Monday’s open will be ugly, with talk of a 28% drop at the open. There are daily limits so there’s a good chance it just won’t open but we will get an idea in ETFs, oil stocks and foreign markets. Saudi Arabia announced hi drastic crude price cuts...

The Trading Room: Weekly Market Review – Week 10, 2020

Markets globally had a week full of uncertainties as the coronavirus outbreak continued it’s sweep across the globe. Despite Friday’s selloff, stocks are right around where they closed last Friday, and they could still end the week positive. That’s how crazy the past few days have been. Oil prices slid more than 3% on Friday after Reuters reported that Russia will not agree to steeper oil output cuts by OPEC and its allies to support...

Morning Note: Global Markets Down, Shilling Under Pressure.

Data from commercial banks reveal the shilling is under pressure since Tuesday when Central Bank of Kenya announced they will buy back a total of $400 million (Kes41.2 billion) from commercial banks in the next four months— $100 million (Kes103 million) per month— in order to bolster its Forex reserves that at the end of last week stood at $8.409 billion (Kes866 billion). Commercial banks quoted an average of 103.00 in morning interbank trading, before...

Market Report 05 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 12,842,900 shares in 906 deals, corresponding to a market value of KES 420,724,365.00, were traded. Compared with the previous NSE trading day (Wednesday, March 4), today’s data shows 52% decline in volume, 45% decline in turnover, but 3% improvement in deals. The current NSE market capitalization is KES 2.38 trillion. In the aggregate, 48 NSE listed equities participated in...

Morning Note: Markets Optimistic, Small Caps top NSE Gainers.

A report by  Standard Investment Bank (SIB) has revealed that the small cap stocks have been performing well on the exchange, despite the gains being made on the back of very thin traded volumes of less than Sh300,000 on each counter, small cap counters trampled the know blue-chip companies. Express Kenya, Olympia Capital & Portland Cement were seen as the top counters in terms of capital gains on the NSE. The G7 central banks may...

Bank of Canada Follows Feds, cuts rates as coronavirus delivers ‘negative shock’

Before the outbreak, the global economy was showing signs of stabilizing, as the Bank had projected in its January Monetary Policy Report (MPR). However, COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted. This has pulled down commodity prices and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity.

Market Report 04 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 26,580,800 shares in 882 deals, corresponding to a market value of KES 762,309,536.00, were traded. Compared with the previous NSE trading day (Tuesday, March 3), today’s data shows 21% decline in volume, 33% decline in turnover, and 6% decline in deals. The current NSE market capitalization is KES 2.35 trillion. In the aggregate, 45 NSE listed equities participated in...

Morning Note: Did the Feds press  the Panic Button?

The NSE opens this morning with a new wave on uncertainties as global markets. U.S. stocks tumbled and Treasuries surged as investors worried the Federal Reserve’s emergency cut won’t be enough to combat the economic impact of the Coronavirus. Here’s a brief of how markets reacted overnight to the news. Car & General Plc had their profits decline by 19% in the year ended September 2019.clearance cost saw the firm’s net profit fall to Sh182...

Market Report 03 March, 2020

At the end of today’s trading session on the Nairobi Securities Exchange (NSE). A total of 33,513,300 shares in 936 deals, corresponding to a market value of KES 1,137,312,109.00, were traded. Compared with the previous NSE trading day (Monday, March 2), today’s data shows 16% improvement in volume, 30% improvement in turnover, and 4% improvement in deals. The current NSE market capitalization is KES 2.32 trillion. In the aggregate, 41 NSE listed equities participated in...

Morning Note: Where’s that Bull?

1. Global Markets soared yesterday for the first time in two weeks as China reported lower cases of the Corona Virus infection.The S&P 500 surged 4.6% Monday, rebounding from the worst week for stocks since the financial crisis of 2008. 2. The Nairobi Securities Exchange major indices had a major boost as foreign activities on the market rose, foreigners are taking positions for Dividend considerations strategy & capital gains considering the favourable price range of...

Market Report 02 March, 2020

At the end of the first weekday of trading on the Nairobi Securities Exchange (NSE).  A total of 28,787,000 shares in 897 deals, corresponding to a market value of KES 872,110,318.00, were traded. Compared with the previous NSE trading day (Friday, February 28), today’s data shows 7% improvement in volume, 11% decline in turnover, and 22% decline in deals. The current NSE market capitalization is KES 2.28 trillion. In the aggregate, 44 NSE listed equities...

Morning Note: Of Diaries in March.

It’s a new month today & here’s what to know as markets open. 1. East African Breweries Plc closed their books on Friday, as markets open, expect the usual books closure effect of the stock. As an investor, for a company with a high foreign exposure, take note the counter may be hit further today. 2. Kenya Power & Lighting Company Plc released their Half Hear results. The company recorded a 71.8 percent to Sh693...

The Trading Room: Weekly Market Review – Week 9, 2020

Fears of a sustained global economic impact as the coronavirus rapidly spreads beyond China have sent investors scrambling to find safety with stock markets experiencing their largest weekly drop in a decade on increasing concerns that the coronavirus outbreak will turn into a global pandemic. While the rate of new cases slowed in China, the headlines that the virus is spreading at an increased rate outside China. This caused almost every single stock index in...

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