The raft of dividend announcements and record earnings made in the past three weeks has failed to excite the stock market, with share prices registering muted growth despite the attractive returns on offer.
Six tier one banks and BAT Kenya #ticker:BAT currently have their books open for dividends, but since announcing the payouts, their share prices have registered movements of between -1.3 percent and 1.6 percent.
Stanbic Kenya #ticker:SBIC is the only outlier with a share price gain of 6.8 percent to Sh102 since its announcement of a dividend of Sh7.30 per share on March 3.
Analysts expected the enhanced payouts that have followed a recovery in profitability last year to spur a rally in share prices as investors eye a slice of the dividends, but this has failed to materialise.
“The Russia-Ukraine conflict, elevated global inflation and depreciating local currency have created a depressed investing environment. Subsequently, foreign investors have exited emerging markets leaving behind attractive dividends. Local investors seem to be disappointed with the dividends as they expected more,” said AIB-AXYS Africa analyst Solomon Kariuki.
The blue chips that have so far announced dividends are also the most popular with foreign investors, meaning that they are likelier to bear the brunt of a sustained foreign selloff in the market.
KCB #ticker:KCB announced a final dividend of Sh2 per share on March 17 but has since then seen its share price retreat by 1.3 percent, from Sh44.40 to Sh44.
BAT Kenya’s Sh50 per share dividend has also failed to ignite a price rally, trading at Sh487 yesterday, a 0.8 percent decline from its price of Sh490.75 when it announced the payout on February 18.
Standard Chartered Bank Kenya #ticker:SCBK and Co-operative Bank #ticker:COOP have both gained 0.4 percent since announcing their final dividends of Sh14 and Sh1 on March 14 and March 17 respectively, closing at Sh141.25 and Sh13.10 on Tuesday.
Others that have made modest gains despite dividend announcements include Absa Kenya #ticker:ABSA at 1.2 percent to Sh12.40 following the announcement of a Sh1.10 per share payout on March 15, while Equity Holdings #ticker:EQTY gained 0.9 percent on Tuesday after announcing a Sh3 per share dividend.