Equities market loses steam over new laws debate

The sector earned Sh13.3 billion in the first two months of this year, doubling the performance recorded in similar period last year and is expected to rake in Sh70 billion by December.

High corporate earnings reported in the past few months are expected to excite investors to buy into listed company shares.

Telecoms operator Safaricom, for instance, reported a record pre-tax profit of Sh21 billion and announced a dividend payout of Sh8 billion for the year ended March, doubling the previous year’s payout to shareholders.

Reduce stake

National carrier Kenya Airways also rewarded its shareholders with a Sh462 million dividend payout after posting a Sh2.67 billion pre-tax profit — a major leap from the Sh5.66 billion loss it made in 2008.

The NSE 20 Share Index has risen to 4,309 points, the highest level since the third quarter of 2008.

The NSE All Share Index has rallied to break into 90 mark in April after dipping to a low of 50 in February last year.

Analysts say the ongoing sale of 887 million shares in KCB’s rights issue, together with other upcoming rights issues from TPS Serena and Standard Chartered Bank would boost liquidity and drive interest in the equities market.

There will be a total of one billion new shares valued at about Sh20 billion once the three companies are through with raising capital.

The government’s plan to reduce stake in listed companies, including KenGen and East African Portland Cement Company, and to sell State-owned firms such as Consolidated Bank, Kenya Pipeline Company, and sugar mills through initial public offerings are set to further improve activity in the equities market.