Thirteen listed companies on the Nairobi Securities Exchange now have a dividend yield of more than 10 percent, rivalling and in some cases exceeding returns on the one-year Treasury bill.
The higher cash returns, available to those investing at current market prices, come amid the deepening selloff at the bourse attributed to foreign investor flight.
The 13 firms with yields of between 10.99 percent and 16.27 percent include Kenya Re, Absa Bank Kenya, Standard Chartered Bank Kenya and Williamson Tea, based on Friday’s closing prices.
The interest rate on the 364-day T-bill meanwhile rose to 11.27 percent in the latest auction.
While the bear market has generated significant paper losses, it has raised the dividend yields for income-focused investors taking positions for the long term.
Such investors can now expect nearly the same cash returns available on short-term government securities on their holdings of the leading dividend payers trading on the bourse.
StanChart has the highest yield of 16.27 percent followed by Umeme (15.93 percent), I&M Group (13.27 percent), NCBA Group (13.26 percent), Absa (13.24 percent), Carbacid (13.18 percent) and Co-operative Bank of Kenya (12.5 percent).
The rest are BAT Kenya at 12.22 percent, Williamson (11.73 percent), ILAM Fahari I-Reit (11.73 percent), Bank of Kigali (11.69 percent), Stanbic Holdings (11.25 percent) and Kenya Re (10.99 percent).
Stanchart’s market-leading yield is the outcome of its higher payout and a fall in its share price after closing its books for the latest dividend distribution.
The bank’s share price dropped 2.35 percent to close at Sh135.25 on Friday, approaching the 52-week low of Sh123 set on May 20, 2022.
The stock declined despite StanChart growing its net income by a third to Sh12 billion in the year ended December when it also raised its dividend to Sh22 per share from Sh19 per share in the prior year.
Other companies whose stocks have been falling in spite of improved fundamentals include Stanbic, I&M and Absa.
The massive selloff has seen Safaricom’s dividend yield approach the 10 percent mark for the first time in its life as a publicly traded firm.
The telco now has a yield of 9.06 percent after dropping 9.86 percent on Friday to settle at Sh13.25, setting a new 52-week low.
A total of 26 stocks were in the red on Friday, with only eight including Standard Group, Home Afrika, WPP Scangroup and Kenya Power registering gains on low-value trades.
Some of the bear run has been attributed to the weakening of the shilling and difficulty in accessing dollars, factors which are hurting returns and causing a flight of some foreign investors while making it difficult to attract new capital to the market.
The exit of foreigners has seen the NSE trail most of its peers on the continent in terms of dollar returns.
