The Nairobi stock market finished on a mixed performance with NASI and NSE 25 recording gains of 2.1% and 2.0%, respectively, while NSE 20 recorded a loss of 0.2%, taking their YTD performance to gains/(losses) of 16.7%, (8.8%) and 13.1%, for the NASI, NSE 20 and NSE 25, respectively.
The performance in NASI was attributed to increased foreign interest and local participation in Safaricom, Equity Group and KCB Group Plc saw the banking and Telecommunication stock close higher and account for close to 70% of the total market activity.
Safaricom and Equity Group Holdings Plc shares moved 72.5 Million and 18.8 Million shares during the week.
Foreign investors accounted for 74.5% of the week’s total activity compared to 64.9% in the previous week. Foreign investors were net buyers during the week, logging net inflows of Ksh 682.4 Million compared to a net inflow of Ksh 481.8 Million the previous week.
Equities turnover increased by 26.6% during the week to USD 41.8 mn, from USD 33.0 mn the previous week, taking the YTD turnover to USD 1,486.5 mn.
Kenya beats sub-Saharan Africa peers as top gainer
According to Genghis Capital, on a YTD basis, Kenya maintains the lead as the top gainer across the SSA markets with Uganda, Egypt, Rwanda, and Tanzania the only other gainers, while the rest of the markets are negative YTD.
Kenya is the top performing SSA stock market, up +16.7% YTD, followed by Egypt at +4.8%. Nigeria is -14.7% YTD.
The cheapest market PE is Zambia at 5.2x & a div. yield of 15.1%. Kenya trades at 12.3x. Nigeria is at 7x & div. yield of 6.2%, a div. yield similar to Kenya. pic.twitter.com/KHIYhQGNJx
— Mihr Thakar (@MihrThakar) December 23, 2019
More Profit Warnings Expected in 2020
During the week, listed companies CIC Insurance, Kenya Airways, Standard Media Group and the Nairobi Securities Exchange (NSE) issued profit warnings, expecting earnings for the financial year 2019 to decline by more than 25.0% compared to 2018.
“We expect listed companies to continue issuing profit warnings in the coming financial year on account of an increasingly challenging macro-economic environment, with World Bank’s 2020 GDP projections for the country expected to grow marginally by 0.1% points to 5.9%, from 2019’s projection of a 5.8% growth.
Furthermore, with public spending expected to tighten in 2020 in line with the government’s target to narrow the fiscal deficit to 6.2%, we expect the performance of companies in key sectors such as commercial, agriculture and manufacturing to be affected,” Notes Cytonn Investments.
Source: Cytonn Investments, Genghis Capital