Markets & Finance

Banks biggest losers at NSE as lenders’ fall spooks investors

brokers

Stockbrokers on the trading floor of the Nairobi Securities Exchange. PHOTO | FILE

Banks are the biggest losers in market value at the Nairobi Securities Exchange (NSE) since the beginning of the year, paying the price for investor apprehension following the collapse of three lenders in the past 12 months.

Eight of the 11 listed lenders have shed value this year, with the sector as a whole dropping nearly Sh53.4 billion in market capitalisation to stand at Sh605 billion.

Among the top 10 companies by market capitalisation, the biggest losers include KCB, Barclays and Cooperative Bank.

Besides Safaricom, the EABL, Bamburi and BAT, the other most valuable stocks at the bourse are Equity, KCB, Cooperative, StanChart, Barclays and DTB.

Compared to the beginning of the year, Cooperative Bank’s 12 per cent decline in value from Sh88 billion to less than Sh77.3 billion has seen it get displaced by BAT Kenya as the fifth most valuable company at the NSE.

The cigarette manufacturer is up by 10 per cent year to date on the back of healthy demand from foreign investors, boosting its market value from Sh78.5 billion to Sh86.5 billion.

“We did see investors take a flight to safety from the banking sector, especially after Chase Bank went under receivership, and they employed a wait-and-see approach to the sector to identify whether poor financial reporting and overall governance was a systemic issue or just case-specific,” said Dyer & Blair head of research Linet Murungi.

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Barclays has slipped down to ninth position from seventh in value after its share price dropped from Sh13.60 to Sh10, giving it a Sh54.3 billion market capitalisation from Sh73 billion in January.

KCB has shed Sh33.2 billion in value this year to stand at Sh99 billion while Equity Bank’s value is down by Sh2.8 billion to Sh148.1 billion.

This means that Equity Bank has been able to widen the gap with KCB as the most valuable lender in the bourse to Sh49 billion from Sh18.5 billion in January.

Equity Bank has been attracting heavy foreign investor purchases this year, as opposed to KCB which has seen investors make net sales on the stock.

Among the banks, only StanChart, I&M and DTB have seen valuation growth. StanChart’s gain has helped it climb to seventh in the top 10 list from ninth at the beginning of the year.