Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 6,974 million (3.70 months of import cover). This falls short of CBK’s statutory requirement to endeavour to maintain at least 4.0 months of import cover as well as the EAC region’s convergence criteria of 4.5 months of import cover.

Currency

The Kenyan Shilling appreciated against the Dollar, the Sterling Pound and the Euro to exchange at KES 135.15, KES 172.35 and KES 147.31 respectively. The observed appreciation against the Dollar is attributed to the increased foreign inflows.

CurrencyYTD ChangeW-o-W Change
Dollar-13.91%-5.36%
Sterling Pound-13.76%-5.42%
Euro-15.17%-5.37%

Liquidity

Liquidity in the money markets increased, with the average inter-bank rate decreasing from 13.55% to 13.17%, as government payments more than offset tax remittances. Remittance inflows totalled $385.90 million in February 2024, a 6.43% decrease from $412.40 million in January 2024 and a 24.81% rise from $309.20 million in February 2023. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate13.55%13.17%
Interbank volume (billion)20.5429.85
Commercial banks’ excess reserves (billion)20.0016.10

Fixed Income

T-Bills

T-Bills were under-subscribed during the week, with the overall subscription rate decreasing to 93.47%, down from 174.24% recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 351.40% while the 182-day T-Bill and 364-day T-Bill had subscription rates of 36.03% and 47.75% respectively. The acceptance rate decreased by 8.15% to close the week at 88.47%.

T-Bonds

In the secondary bond market, there was a lower demand for the week’s bond offers. Bond turnover decreased by 6.14%, from KES 36.24 billion in the previous week to KES 34.02 billion. Total bond deals decreased by 17.13% from 829 in the previous week to 687.

Eurobonds

In the international market, yields on Kenya’s Eurobonds decreased by an average of 0.04% compared to the previous week, 0.28% month-to-date and 0.60% year-to-date. The yields on the 10-year Eurobonds for Angola also declined while that of Zambia increased. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2018 10-Year Issue-0.92%-0.39%-0.15%
2018 30-Year Issue-0.18%-0.23%-0.07%
2019 7-Year Issue-1.42%-0.30%-0.05%
2019 12-Year Issue-0.36%-0.23%-0.02%
2021 13-Year Issue-0.02%-0.21%-0.00%
2024 6-Year Issue-0.69%-0.30%-0.03%
Equities

NASI, NSE 20, NSE 25 and NSE 10 settled 7.29%, 5.25%, 7.02% and 7.88% higher compared to the previous week, bringing the year-to-date performance to 10.71%, 8.54%, 13.19% and 14.34% respectively. Market capitalization also gained 7.29% from the previous week to close at KES 1.59 trillion, recording a year-to-date increase of 10.71%. The performance was driven by gains recorded by large-cap stocks such as KCB, Standard Chartered, Co-operative and Safaricom of 15.94%, 12.62%, 11.07% and 9.35% respectively.

The Banking sector had shares worth KES 991M transacted which accounted for 36.15% of the week’s traded value, Manufacturing and Allied sector had shares worth KES 107M transacted which represented 3.92% and Safaricom, with shares worth KES 1.58B transacted represented 57.63% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
KCB9.34%15.94%
StanChart14.20%12.62%
NBV0.41%12.27%
Standard Group-20.41%12.00%
Coop Bank23.79%11.07%
LosersYTD ChangeW-o-W
Eveready1.69%-8.40%
Sameer-0.88%-6.25%
EA Portland6.25%-5.56%
Centum1.67%-4.90%
Transcentury-13.46%-4.26%

Alternative Investments

LosersWeek (previous)Week (ending)% Change
Derivatives Turnover (million)1.511.531.19%
Derivatives Contracts15.0018.0020.00%
I-REIT Turnover (million)0.000.000.00
I-REIT deals0.000.000.00

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 5007.89%-0.13%
Dow Jones Industrial Average (DJI)2.65%-0.02%
FTSE 100 (FTSE)0.08%0.88%
STOXX Europe 6005.49%0.31%
Shanghai Composite (SSEC)3.12%0.28%
MSCI Emerging Markets Index0.98%-0.23%
MSCI World Index6.11%-0.83%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index-7.05%3.59%
JSE All Share-3.85%-0.93%
NSE All Share (NGSE)38.29%3.71%
DSEI (Tanzania)0.38%0.21%
ALSIUG (Uganda)10.35%3.53%

The US stock market closed in the red zone, as investors digested the recent higher-than-expected inflation data and rising Treasury yields. The data dashed hopes for rate cuts, raising concerns that the Fed will keep rates higher for a longer period to combat inflation.

The European stock market closed the week in the green zone, fueled by strong earnings reports from retail and utilities companies, with investors preparing for the upcoming central bank meetings in major economies like the US, UK and Japan.

The Asian Stock Market closed the week in an upward trajectory, boosted by investor optimism following the People’s Bank of China’s (PBOC) policy decision to maintain key interest rates.

Week’s Highlights

  • The Energy and Petroleum Regulatory Authority (EPRA) released its latest monthly statement on the maximum retail prices of petroleum products, effective 15th March 2024 to 14th April 2024. The pump price of super petrol decreased by KES 7.21 to KES 199.15 per litre, diesel decreased by KES 5.09 to KES 190.38 per litre and kerosene decreased by KES 5.09 to 188.74 per litre. This is primarily attributed to a stable Kenyan Shilling exchange rate against the US Dollar, bringing a huge relief to Kenyan households.
  • February revenues reached KES 1.42 trillion, reflecting a 13.03% increase from the previous month. However, this fell short of the monthly prorated target by 17.02%. Expenses exceeded revenue collections by KES 1.02 trillion, resulting in a 71.45% fiscal deficit, which was financed through external and internal borrowing by 46% and 54% respectively.
  • The Capital Markets Authority has increased the minimum capital requirements for intermediaries. Investment banks will now need at least KES 50 million or 8% of their liabilities; fund managers will hold a minimum of KES 10 million, stockbrokers minimum capital requirements have been maintained at KES 30 million and previously unregulated intermediaries like forex brokers and dealers will face new capital requirements of KES 30 million and KES 10 million, respectively. The more stringent framework aims to strengthen the financial system and mitigate risks for investors.
  • The Competition Authority of Kenya (CAK) approved the acquisition of Certain Style Industries Limited assets by Hair Manufacturing Kenya Limited. However, this approval comes with a caveat: Hair Manufacturing Kenya must retain at least 70% of the acquired company’s staff for a year following the deal’s completion, with their employment terms remaining equivalent to their current ones.
  • The global oil market shows steady demand growth of 2.2 million barrels per day (mb/d) projection for 2024, with the non-OECD region driving the increase. While some adjustments are expected in specific regions like the OECD Asia Pacific, overall demand is on track. Supply presents a mixed picture, with non-OPEC liquids production expected to grow slightly less than initially forecast due to recent production adjustments by some key producers. The US, Canada, Brazil and Norway are expected to be the main supply growth drivers, while Russia and Mexico might see declines.
  • US inflation increased to 3.2% year-on-year in February 2024 from 3.1% in January, exceeding market expectations of 3.1%. This was primarily driven by a smaller-than-anticipated drop in energy costs by 1.9%, particularly gasoline, which fell by 3.9% compared to 6.4% in January. Food inflation decreased to 2.2% and shelter costs also decreased to 5.7%, while transportation costs continued to rise sharply by 9.9%. The monthly inflation rate also edged up to 0.4%. Furthermore, core inflation, which excludes volatile food and energy prices, eased slightly to 3.8%.
  • The British economy grew 0.2% month-on-month in January 2024, up from a 0.1% decrease in December. This aligns with market expectations and offers a glimmer of hope after a technical recession in the latter half of 2023. The growth was primarily driven by the services sector, with a 0.2% rise, particularly in the retail, healthcare and education sectors, which increased by 3.4%, 0.9% and 0.7% respectively. Construction also saw a positive trend, with a 1.1% increase. However, industrial output declined by 0.2%, mainly due to a drop in water and waste management activities. Notably, the UK economy remains slightly smaller than it was three months ago.

Get future reports

Please provide your details below to get future reports:

Reports subscription