The bench mark NSE 20 Share Index has dropped 46.2 per cent since February 27, 2015 to close at 2,951.1 points on Thursday.
That fall is enough to wipe out an investor’s previous 92.4 per cent gain, underlining the depth of the paper losses.
Banks dominate the list of firms with high actual or prospective income returns following the battering of the lenders’ stocks in the wake of the controlled lending rates starting September last year.
The bear run at the Nairobi Securities Exchange (NSE) has significantly raised the dividend yields of several publicly traded companies, offering good returns for savvy investors.
Barclays leads the companies that have declared their final dividend, with its total payout of Sh1 per share amounting to a yield of 11.1 per cent followed by KCB whose Sh3 per share gives a return of 10.5 per cent.
Bamburi Cement’s dividend of Sh12 per share yields 8.2 per cent while Stanbic Holdings payout of Sh5.25 per share gives 7.8 per cent and NIC’s Sh1.25 is a 5.1 per cent return.
Other stocks that could offer high rates of income if the companies maintain or enhance their total payouts include Nation Media Group (11.9 per cent), HF Group (11.8 per cent), Standard Chartered Bank Kenya (8.2 per cent) and Carbacid (five per cent).
The returns beat the effective coupon on the 91-day T-bill, which currently stands at 2.17 per cent (8.68 per cent annualised).
The dividend payouts offers quick returns for new investors and serves to reduce losses of those who have been scarred by the two-year bear market.
The bench mark NSE 20 Share Index has dropped 46.2 per cent since February 27, 2015 to close at 2,951.1 points on Thursday. That fall is enough to wipe out an investor’s previous 92.4 per cent gain, underlining the depth of the paper losses.
Banks dominate the list of firms with high actual or prospective income returns following the battering of the lenders’ stocks in the wake of the controlled lending rates starting September last year.
Most of the banks that have announced their 2016 full year results have maintained or enhanced their dividend payouts, offering good returns for investors who bought shares amid the panic.
Analysts expect this trend to continue noting that the capping of interest rates has reduced banks’ appetite for aggressive lending seen in prior years, making more cash available for distribution to shareholders.
Standard Bank Investment (SIB) says Kenyan banks have also operated with excess capital in the past, a trend that is now likely to be reversed as the lenders seek to enhance their return on equity.
“Guided by our expectation of reduced balance sheet growth, we expect to see increased payout as management seek to optimise return on equity,” SIB said in a research note.
Equity Group is set to announce its 2016 full year results on Wednesday, with other listed banks also set to follow suit in the coming days in what is expected to shed light on the industry’s dividend policy in the new environment.
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Note: The results are not exact but very close to the actual.
