Capital Markets

Safaricom stock pushes up NSE market value


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

The market capitalisation of the Nairobi Securities Exchange grew by Sh42 billion last week on the back of a gain on the Safaricom stock.

The market cap of the bourse stood at Sh2.113 trillion on Friday, with its gain tracking that of Safaricom whose market cap was up by Sh50.1 billion to Sh851.4 billion after the stock gained 6.25 per cent or Sh1.25 to Sh21.25 a share during the week.

The NSE 20 share index also made a weekly gain in value for the first time in six weeks, closing 0.4 per cent up at 3,462 points as major stocks halted the steady decline in prices that has been seen in recent weeks.

A number of companies such as KCB, Standard Chartered, Cooperative Bank, CIC Insurance, KenolKobil and I&M Bank have announced their half-year results, which usually give a good indicator of the prospects for the full year and can induce investor buying activity on stocks based on projections of a good dividend.

“Most of these companies have posted stronger earnings in 2016 compared to 2015, supported by a favourable macroeconomic environment. Given the low valuations, long-term investors should gradually be taking positions in the market,” said Kingdom Securities in a stock report.

READ: Foreign investors pump Sh1bn into top NSE company shares

The traded turnover last week as a result rose to Sh3.8 billion from Sh1.7 billion the previous week, with the number of shares traded also doubling from 79 million to 159 million.

Last week, blue chip counters like EABL, Equity Bank and KCB showed minimal movement during the week. EABL was down 0.7 per cent to Sh270, Equity Bank down 1.3 per cent to Sh37.75 and KCB was unchanged at Sh32.50.

The leading gainers in the market were drawn from small cap counters, led by Olympia Capital at 20 per cent to Sh2.40 and TransCentury at 9.5 per cent to Sh4.60.