Wealth at NSE hits 1.76trn as half year results trickle in
A trader monitors stocks at the NSE. Investor wealth at the NSE has hit a record Sh1.76 trillion high. FILE
What you need to know:
Market capitalisation stood at Sh1.752 trillion on Thursday, from Sh1.733 trillion on Monday August 8.
The NSE has so far in August registered a gain of over Sh26 billion in capitalisation, having gained Sh109 billion from the end of June to the conclusion of July.
Analysts expect investor interest at the bourse to remain high, extending beyond the half-year earnings announcements as investors position for dividends.
Investor wealth at the NSE has hit a record Sh1.76 trillion high with Kenya’s largest company Safaricom helping drive up capitalisation.
The market has also seen a rising demand for bank stocks in the last few weeks driven by expectations of higher half year earnings.
Market capitalisation stood at Sh1.752 trillion on Thursday, from Sh1.733 trillion on Monday August 8.
The bourse has so far in August registered a gain of over Sh26 billion in capitalisation, having gained Sh109 billion from the end of June to the conclusion of July.
Shareholders of the large-cap counters of Safaricom, Equity Bank and Kenya Commercial Bank enjoyed the biggest cumulative gains in the past week, with Safaricom rising by 6.2 per cent to hit an all-time high of Sh8.
“The Safaricom counter has witnessed a rise weeks before its books closure for the Sh0.31 dividend on September 12. With banking stocks continuing to release their half year results, focus is on DTB, KCB and NIC banks,” said ABC Capital.
At a price of Sh8 a share, Safaricom has broken back into the Sh300 billion valuation range, with a total value of about Sh320 billion.
The rise in price of the counter comes as a boost to the approximately 690,000 shareholders who hold less than 10,000 shares each.
Their holdings of just over one billion shares have appreciated from Sh5 at the beginning of the year, giving them an accumulated gain of Sh3 billion.
Treasury, with its 14.02 billion shares has seen its stake rise from Sh70 billion at the beginning of the year to the current valued of Sh112 billion. The biggest shareholder Vodafone’s stake is worth Sh128 billion at Monday’s price.
The increased demand for bank shares saw KCB touch a one-year high of Sh44.50 in trading Monday as investors anticipate good half year results in line with those of Equity Bank, which saw a 16 per cent rise in net earnings compared to the same period last year.
CFC Stanbic gained 2.2 per cent in the past week, ahead Monday’s announcement of results that showed a rise in its half year net profit by 82 per cent, with an interim dividend ofSh1.47 per share. DTB also announced a net profit rise of 38.4 per cent on Monday.
Analysts expect investor interest at the bourse to remain high, extending beyond the half-year earnings announcements as investors position for dividends.
“For most of the year the foreign participation has been above 50 per cent and this can be sustained, with KCB and EABL which report their half year results in August, and Safaricom and parastatals announcing theirs in September and October,” said Kestrel Capital analyst Kuria Kamau.
Foreign investor inflows remained high in the past week at Sh785 million ($8.98 million) after the Sh788 million ($9.01 million) of the previous week.
The increased appetite for stocks by local investors saw foreign participation decline to 36.6 per cent of trades last week compared to 63.7 per cent in the previous week.
The second biggest company in the bourse, EABL, however bucked the trend of gains by dropping two per cent during the week to Sh338.
