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NSE Weekly Market Review – Week 31, 2020

The Nairobi Securities Exchange ended the week lower this week, with the benchmark NSE All share index (NASI) shedding 1.36 points or 1.01% to close the short trading week, on Thursday at 133.23 points. This represented a 4-week loss of 3.3%, and an overall year-to-date performance of -19.94%.

Market capitalization of the NSE was at similar levels from the previous week, closing at a valuation of Kes 2.0 Trillion, backed by the trading activities, cum-dividend on WPP Scangroup & Safaricom Plc which closed their books on 28th and 30th July respectively.

East African Breweries Plc announced their earnings for FY20, recording a 54% annual decline in attributable Earnings Per Share [EPS] to Kes 5.17. Net revenue similarly declined by 9.2% owing to the closure of bars and reduction in sales of alcoholic beverages due to the Covid-19 pandemic. EABL Did not declare a final dividend.

In the week, Safaricom’s board of directors announced the appointment of Michael Joseph as the new board chairman, following the retirement long time chair, Nicholas Nganga who has served on the company’s board for 16 years (13 of which he served as the chairman). The telco giant also held its 12th AGM (virtually) today, where shareholders approved the final DPS of KES 1.40.

Activity level on the NSE slumped both by volumes and values, with the turnover for the market closing at Kes 1.5 Billion achieved on trades of 52 million shares from the 115 million shares valued at Kes.3.3 billion transacted the previous week.

Safaricom and the banking sector were the most active sectors, accounting for 42.21% and 32.54% of the week’s traded value respectively. Safaricom rose 0.18% through the week as it closed books, closing at a price of Kes 28.15 per share from the Kes 28.10 marked last Friday. Notably, WPP Scangroup Plc shed 42.20% in value to Kes.11.30, down from Kes.19.55 registered the previous week with shares worth Kes.29.M transacted through the week as the company closed books for dividend consideration.

NSE 20 share Index One Year Chart Performance.

The Derivatives Market of the NSE closed the week with a total of 9 contracts valued at Kes.255,500 concluded on the NSE while the secondary bond market on the Nairobi Securities Exchange closed the week with bonds worth Kes.21.6 billion transacted compared to Kes.12.9 billion registered the previous week, showing increased investor appetite on fixed income securities.

Outlook

The week is likely to be marred with lower activity in terms of pricing as market correction holds for companies that have closed their books. Safaricom could turn lower, to levels of Kes 26.50 per share on the normal book closure effect. Investors will also be watching keenly as results for the Half Year for most of the companies are expected to flow in starting the first week of August. This will give a great image on what investors should expect when the Full Year results come in.