Capital Markets

KCB and Equity top list of shares attractive to foreigners

A Nairobi Securities Exchange worker: KCB and Equity received highest inflows. Photo/FILE
A Nairobi Securities Exchange worker: KCB and Equity received highest inflows. Photo/FILE 

KCB and Equity banks were the main attraction to foreign investors in May as they took the lion’s share of dollar inflows on the Nairobi Securities Exchange (NSE).

The two banks received the highest inflows from foreign investors in May to the tune of Sh1.93 billion ($21.96 million) and Sh1.2 billion ($13.74 million) respectively, Standard Investment Bank (SIB) data shows.

East African Breweries Limited (EABL) attracted the third highest inflows of Sh480 million ($5.45 million).

Share prices of most of the 11 listed banks have gone up in recent months, but NIC and Barclays lost ground.

Analysts said that foreign investors were keen on the two banks due to their growth prospects as the financial institutions tend to perform well even when the rest of the economy is underperforming.


“Equity Bank’s unveiling of the mobile virtual network operator (MVNO) business has given the bank a boost. People see opportunity in this,” said Augustine Misoka, a research analyst with Nairobi-based brokerage firm Sterling Capital.

Mr Misoka said that investors were also bullish about KCB explaining why it was among the top gainers in price on the NSE as compared to other listed firms.

Across all the NSE-listed firms, SIB data showed that net foreign inflows rose for the second consecutive month after having been on the negative for the first three months of the year.

In May, foreign inflows amounted to Sh2.35 billion ($26.65 million) up from Sh1.44 billion ($16.38 million) in April. There was a net outflow in January, February and March of Sh1 billion, Sh1.6 billion and Sh438 million, respectively.

KCB and Equity share prices rose by 3.7 per cent and 35.8 per cent, respectively on Tuesday compared to the beginning of the year. In the past 12 months, KCB share price has risen by 17 per cent to stand at Sh48. In the past three months, however, the bank has gained 9.1 per cent.

The bank registered a 17 per cent increase in net profit to Sh14 billion for the year that ended last December.

In the first quarter of this year, the bank recorded 29 per cent rise in net profit to Sh3.9 billion.

In the past 12 months, Equity Bank’s share has gained 15 per cent.

The share rose by 28 per cent in the past three months at a time that the bank released its full-year 2013 and first quarter 2014 financial results.

As at the end of last December, Equity Bank’s net profit hit Sh13.278 billion having grown by 9.9 per cent from the previous year while its 2014 first quarter net profit rose by 21 per cent to Sh3.879 billion compared to the same quarter last year.