An Equity branch in Nairobi. It is the first bank to be valued at over Sh200 billion at the NSE. PHOTO | FILE | NATION
What you need to know:
The bank has been on a rally since it acquired an MVNO licence and announced plans to use thin-SIM technology to enter into mobile money business.
Equity became the first bank to be valued at over Sh200 billion at the Nairobi Securities Exchange after it rallied to an all-time high of Sh59.50.
The bank has been on a rally since it acquired an MVNO licence and announced plans to use thin-SIM technology to enter into mobile money business. At an average price of Sh57, the bank is currently valued at Sh211 billion by investors, only Sh3 billion shy of the second largest company in the market, EABL, and Sh33 billion ahead of rival KCB.
Equity disclosed it would start using the thin-SIM technology from next month as soon as it gets written approval from the Communication Authority of Kenya and the Central Bank. Telecommunications giant, Safaricom, had opposed the use of the SIM cards on the ground that it could threaten the security of its M-Pesa platform but CAK has agreed to give the bank a one-year trial licence.
Equity is also expected to book a one-off gain from the sale of its 24.76 per cent shareholding in Housing Finance valued at Sh2.8 billion to Britam Insurance. The share sale awaits approval of the Central Bank and the Competitions Authority.
The rally of the lender at the market helped the NSE indicative 20 Share Index gain 84 points on Friday to leap past the 5300 mark for the first time in over six years. “Bolstered by Equity Bank and Centum price gains, the NSE 20 index closed in the black, setting an all-year high of 5,307.5 points,” said Standard Investment Bank in a note to investors.
The NSE index is rallying without input from the two largest companies in the market,—EABL and Safaricom. Safaricom remains the most capitalised company at the bourse, valued at Sh504 billion.
Centum Investments continued its rally, touching a high of Sh73 following an aggressive expansion plan that has seen it acquire fund managers, Genesis, express interest in agricultural firm Rea Vipingo and mid-tier lender K-Rep Bank. Recently it bagged a Sh170 billion tender to construct a coal energy plant in Lamu.
Competing bidders had said they would challenge the awarding of the tender in court.
Other counters touching year highs include Standard Chartered at Sh347, Housing Finance (Sh50), KCB (Sh60), recently listed NSE (Sh25.75) and agricultural firms Kakuzi (Sh190) and Kenya Orchards (Sh41.50).
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