2022 Week 46: Market Cap Trainers Summary

• The all-inclusive NASI share price index increased by 0.73% from 128.09 to 129.02 during the week ending November 18.
• The NSE 20 share price index decreased by 0.10% from 1666.47 to 1664.82 during the week ending November 18.
• The NSE 25 share price index increased marginally by 1.35% from 3088.01 to 3129.79 during the week ending November 18.
• Market capitalization increased from KES 1.996 trillion to KES 2.010 trillion in the week ended November 18.This was in line with NASI index that tracks the performance of the whole market. It is worthy to note that Safaricom Plc market capitalization (Ksh 1.012 trillion) currently accounts for 50.70% of NSE market capitalization.
• Volume of shares traded increased by 100.00% to close the week at 78.00 million, compared 39.00 million recorded in the previous week.
• Equity turnover increased by 58.33 percent to Kshs 1.90 billion for week ended November 18 compared to KES 1.20 billion in the preceding week. Year to date shares worth Kshs 79.73 billion have been traded in the Nairobi Securities Exchange. It’s worthy to note that the NSE Plc makes 0.24% of equity turnover as equity trading fees which accounts for over 58% of its total income.

CORPORATE ANNOUNCEMENTS AND KEY EVENTS FOR THE LAST WEEK AND CURRENT WEEK

• In the Treasury bills auction of November 17, the government sought to raise KES 24 billion but received bids totalling KES 49.09 billion representing a performance of 204.53% percent. Amount accepted amount to KES 38.34 billion compared to KES 39.47 billion last week.  Interest rate on 91-Day Treasury bill, 182-Day Treasury Bill and 364-Day Treasury bill was 9.173%, 9.706% and 10.186% respectively. The subscription rates across the three papers were 662.83%, 138.92% and 86.83% respectively.
• The bond market reported increased activity with bonds worth KES 14.40Bn transacted compared to KES 12.80Bn registered the previous week.

• The government of Kenya wants to raise KES 5 Billion through a tap sale of Infrastructure bond IFB1/2022/014. The period of sale is from 16 November 2022 to 22 November 2022 or on attainment of application of amounts being looked for in tap sale whichever comes first.
• Safaricom finally received regulatory approval to launch a wealth management product dubbed Mali. It is a money market fund whereby you can deposit idle MPESA funds to generate interest for you with interest accruing daily. The product can be accessed by USSD Code *334# tab 5for financial services. It will roughly pay an interest rate of 10% annually. The fund manager will be Genghis Capital.
• The government of Kenya wants to sell Kenya Airways to a strategic foreign investor. If successful this will see the government avoid the billions of shillings paid out to KQ to keep it afloat yearly.
• As per data released by the Central Bank of Kenya under County Finance Access report 2022, it focused on the four dimensions of financial inclusion which include: access; usage; quality and impact dimension. On the usage dimension, Nairobi, Mombasa, Kiambu and Kisumu had the highest level of people using banking services whereas Tana River; Garissa and Marsabit were at the bottom of the pyramid. Overall 81.4% of Kenyans use mobile money services showing dominance of Telcos like Safaricom PLC. Overall 15% of Kenyans are able to afford their day to day needs; deal with emergencies and invest in future goals (top wealth quintile) a decline from 40% reported in 2016.
• The Central Bank of Kenya has given a lifeline to 4.2 million mobile phone defaulters who will get a discount of 50% percent of the defaulted loan amount, if they pay by or before 31 May 2023.Anybody who takes up the offer will see their records cleaned in the credit reference bureau and thus will no longer be blacklisted from receiving future loan amounts. Its worthy to note most of these loans had been written off, so reduction does not affect the banks income and will infact be recorded as a gain for the concerned bank in case of recoveries.
• Equity, KCB and Coop Bank are most efficient as compared to other peers in Sub Saharan Africa as measured by the return on assets. Their return on assets averaged 3.8 percent in the first half of 2022 as compared to a sub Saharan average of 1.7 percent as per rating agency Moody. The digitisation of their operations has contributed to the high return on assets enjoyed by the banks.
• Safaricom Ethiopia subscribers hit 1 million on 15 November 2022. This is amazing given the full roll out of Safaricom operations in Ethiopia was on October 2022.
• Former KCB Group Chief Executive Officer is taking over as CEO Stanbic Kenya and South Sudan from 1 December 2022. This is extremely interesting given the stature of KCB in the banking sector in Kenya.
• KCB Group reported a 15.32% growth in turnover to KES 79.91 billion for the period ended 30 September 2022. Profit after tax for the 9 months of the year was KES 30.60 billion which is over 21.43% higher than KES 25.20 billion during the same period previous year. Its earnings per share increased from KES 10.44 for period ended 30 September 2021 to KES 12.64 for period ended 30 September 2022. Its book value per share increased from KES 50.72 for period ended 30 September 2021 to KES 58.43 per share for period ended 30 September 2022.Its return on average equity increased from 22.00% in 2021 to 23.30% in 2022. Given the above the justifiable valuation for each share of KCB Group is KES 58.00 per share.
• The long awaited Hustlers fund will be launched on 30 November 2022. For personal loans they will have a limit of KES 500-KES 50,000. For chamas the loan will range from KES 50,000 to KES 250,000. It will carry an interest of 8% per annum. It will be administered through a mobile platform.

LOCAL MARKET SUMMARY FOR WEEK ENDED 18 NOVEMBER 2022