Closure of dividend registers shifts investors’ focus

Eight firms listed at the Nairobi Securities Exchange are set to close their shareholder registers for dividend payment this month, among them the blue chip counters of Safaricom, East African Breweries, Nation Media Group, Jubilee, Bamburi and Barclays.

This has shifted investor focus to economic fundamentals that are likely to shape performance of the firms in the second half of the year.

Emerging inflationary pressures triggered by the enactment of the VAT Act and political risks generated by the International Criminal Court hearings set to start this week could drive the market in the coming months.

Analysts say investors will be keen on identifying stocks that are likely to generate good returns in the short term, with the positive momentum that has characterised the bourse expected to continue.

“In the coming month, political intrigues around the devolution question and the planned Hague trials are likely to inform trading themes going forward.

“Foreign investors will be keen to see how these events affect the country’s macro-economic performance. As such, we are likely to see a slowdown in foreign activity momentum,” said risk and research firm Stratlink Kenya in an equities markets update.

Stratlink Kenya sees renewed interested in the commercial sector, where activity will largely be informed by the recent uptick in macroeconomic factors, with investors keen to see this activity translate into positive earnings.

Standard Investment Bank (SIB) research analyst Eric Musau says the effect of the Hague trials on the market will depend on how they are handled.

He does not, however, see the market experiencing much volatility in the short term, especially given that most companies’ half-year numbers came in as per expectations.

In the past two months, investor attention has been on the companies that have been reporting their half and full-year results, mainly with an eye on earnings and dividend numbers.

Some of the counters closing their books in September have enjoyed prices touching or approaching one-year highs.

Safaricom touched its all-time high closing price of Sh8.15 in August while BOC Gases touched its one-year high of Sh125 on September 4, ahead of books closure on September 6.

NIC Bank also traded close to its 12-month high of Sh59 on Friday, touching an average of Sh58.50.

EABL, which had slid to a four-month low of Sh285 per share in late August after announcing a 37 per cent fall in full-year net profits, has continued to show recovery, once again moving back to the Sh300 level on Friday. Its register closes on September 30.