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NSE Weekly Market Review – Week 47, 2020

Market activity on the Nairobi Securities exchange was higher as investors cautiously traded on corporate quarterly results and global data of the coronavirus. Foreign investors held majority position in trading this week, accounting for 79.23% of the week’s total trading activity. Foreign activity was high on the main blue-chip counters and across listed banks.

Total Market Volume for the week stood at 71.5 million shares against a volume of 82.4 million shares transacted in the previous week. The market capitalization of the NSE posted a marginal decline of 0.15% at Kes 2.206 trillion from the 2.209 trillion posted the previous week, attributed to the drop in prices in the banking sector.

The benchmark NSE All Share Index (NASI) closed Friday at 143.72, representing a week on week (W/W) decline of 0.15%, a 4-week month to month (M/M) gain of 1.78% but and an overall year-to-date (YTD) loss of 13.63%. The NSE20 and the NSE25 share indices were similarly lower, shedding 0.20% and 0.76% to close the week at 1,785.88 and 3,255.68 points respectively. 

The NSE 20 and the NSE25 share indices have shed up-to 32.72% and 20.60% respectively in year to date performance.

Safaricom was the most active counter by turnover, accounting for 45.40% of the week’s traded value as the share saw a 0.63% gain in share price to close the week at Kes 32.00 per share. The banks cumulatively followed in activity with 804 million worth of shares transacted, translating to 36.78% of the week’s traded value. Coming in third was the manufacturing and allied sector, with shares worth 270 million transacted with most being foreign activity.

During the week, banks continued to release their results, with ABSA, Co-operative bank and Standard Chartered publishing their quarterly performance, with most results indicating that the sector was badly hit by the coronavirus pandemic and monetary easing actions taken  by the Central Bank of Kenya.

Co-operative Bank of Kenya reported a 10.2%y/y decline in earnings to Kes 1.67 billion. ABSA bank posted a solid operating profit (profit before impairments) at +6.2%y/y driven by a 2.5%y/y growth in the top line while slashing costs by 1.1%y/y. Stanchart reported a 30.6% decline in profit at Kes.4.3 billion for the nine month period ended 30th September 2020. The banks attributed the decline in profits to a surge in loan impairment charges (Loan loss provisions).

The derivatives market of the NSE posted a first time week with no contracts concluded on the market.

The NSE 20 Share index one year performance chart

The secondary trading on the bond market saw a growth in activity with bonds, posting a 31.5% rise in turnover with bonds valued at Kes.12.5 billion billion traded against the Kes 9.5 billion worth of bonds transacted in the previous week.