Capital Markets

10 NSE firms trade at one-year lows after negative reports, sell-offs


Kenya Airways traded slightly above its one-year low of Sh3.70 per unit. PHOTO | FILE

Ten listed companies are trading at one-year lows with the indicative Nairobi Securities Exchange (NSE) 20 share index hitting a new four-year low Monday.

The NSE 20 share index lost 16.09 points on Monday to close at 3508.49, levels last seen in 2012.

The bearish market is a good entry point for savvy investors banking on a reversal that will put them in the money. Foreign investors have been buying on the cheap.

“Foreign investors were net buyers for the sixth straight session. Overall, their participation stood at 69.7 per cent,” said Standard Investment Bank in its report.

Some of the companies trading at 52-week lows include oil distributor Total, Stanlib Reit, Nation Media Group, Co-operative Bank and Mumias Sugar.

The fall in share prices has been attributed to negative corporate announcements and some foreigner sell-offs.

The banking sector has been one of the source of negative announcements with rising non-performing loans and the collapse of lenders who had issued corporate bonds to investors.

The decision by the Central Bank of Kenya to instruct an audit of all insider loans has signalled concerns over corporate governance issues in the sector.

Kenya Airways which announced a record Sh26.6 billion loss last week held steady in Monday’s trading with an average price of Sh4.05 per unit signaling investors had already factored the poor performance in their valuation.

The counter traded 82,400 shares with the lowest price during the session being Sh3.95 per share, slightly above the one-year low of Sh3.70 per unit.

Half of the market’s decline this year has come in the past month, when emerging markets like the NSE have been feeling the heat of cautious trading in the wake of the Brexit vote that has had the effect of pushing capital towards the US and European markets, traditionally regarded as more secure.

READ: NSE shares fall after Brexit offers buyers cheap stocks

Before the June 23 Brexit vote, the NSE 20 Share Index was 7.3 per cent down on a year-to-date basis. The market has gone on to add a decline of six per cent in the four weeks since the vote.

However tobacco company BAT is moving against the grain trading at a one-year high of Sh870 per share.

The counter, which had initially been battered by reports of increased regulation in the tobacco industry including placing of large graphic warnings on their packets, has rebounded in recent weeks.

Telecom giant Safaricom has also maintained a strong performance trading 8,331,800 shares on Monday at an average price of Sh18.10 up from Sh18.05.

BAT and Safaricom’s performance at the stock exchange boosted the markets total capitalisation by Sh3 billion to Sh1.996 trillion.