Foreign Exchange Reserves
The CBK’s usable foreign exchange reserves slightly declined from the previous week to stand at USD 9.67 bn (5.87 months of import cover). This meets CBK’s statutory requirement to endeavour to maintain at least 4.0 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover.
Currency
The Kenyan Shilling depreciated against major currencies over the week, trading against the USD at Kshs 107.35 up from Kshs 106.90, the Euro it traded at Ksh 122.51 up from Ksh 121.17 but appreciated against the Sterling Pound to trade at Ksh 134.92 from Ksh 135.21 recorded last week. The shilling was under pressure due to increased demand in the inter-bank market. However, it remained relatively strong against the regional currency and declined against the Rand by 187 basis points.
Liquidity
Liquidity continued to improve from the previous weeks on account of government payments, open markets operations remained active during the week. The weekly mean of the daily weighted average inter-bank rate declined to 1.786% from 1.788% in the previous week. The volume transacted increased by 156.01% to stand at Kshs 9.8 bn. Commercial banks’ excess reserves stood at Kshs 10.9 bn which was a decline from Kshs 29.80 bn.
Fixed Income
T-Bills
T-bills remained oversubscribed at a rate of 271.54% which was a decrease from 358.18% in the preceding week. The over-subscription is owed to high liquidity in the money market and investors’ preference for short-term papers. The subscription rates for the 91-day and 182-day decreased to 746.94% and 107.81% respectively. The subscription rate for the 364-day papers increased to 245.11%. The yields on the 91-day, 182-day, and 364-day papers, significantly decreased to 6.01%, 6.52%, and 7.46% respectively.
T-Bonds
The bonds market registered increased activity from the previous week with the total bond deals increasing from 52 to 63, bonds turnover increased by 77.76% to Kshs 2.24 billion. In the international market, yields on Kenya’s Eurobonds remained stable rising marginally by an average of 12.4 basis points. Similarly, the yields on the 10-year Eurobonds for Angola increased while that of Ghana declined.
Equities
The Equity Market closed the week with 23.2m traded shares valued at Kshs 543m against 39.5m shares valued at Kshs 731m transacted in the previous week. The market capitalization declined marginally by 0.10% to Kshs 2.02 billion.
NASI declined by 0.10%, while NSE 20 and NSE 25 increased by 0.42% and 0.49%, respectively.
The Banking sector had shares worth Kshs 1bn transacted which accounted for 30.81% of the week’s traded value, Manufacturing & Allied sector traded shares were worth Ksh 76.8 million and represented 5.39%. Safaricom declined from Sh 27.50 to Sh 27 from the previous week. It had shares worth Sh 2 billion transacted which represented 59.76% of the week’s traded value.
Top Gainers and Losers in the Equities Markets
| Top Gainers | W-o-W |
|---|---|
| Trans-century | 21.76% |
| Kenya - Re | 20.00% |
| EA Cables | 16.24% |
| Sameer | 14.21% |
| Standard Group | 13.44% |
| Top Losers | W-o-W |
|---|---|
| HF Group | -11.11% |
| NSE | -7.28% |
| Nation Media | -6.64% |
| Unga | -6.03% |
| Centum | -5.34% |
Alternative Investments
The were no active deals in the derivatives market at weeks end, open interest total was at 97 at week end.
The I-REIT market registered improved activity with a turnover of Kshs 45,840.00 from 4 unit deals against a turnover of Kshs 101,618.00 from 12 unit deals in the preceding week.
The were no activity in the ETF market.
Global and Regional Markets
| Global Markets | W-o-W |
|---|---|
| S&P 500 | -0.97% |
| Dow Jones Industrial Average (DJI) | -0.52% |
| FTSE 100 (FTSE) | -1.60% |
| STOXX Europe 600 | -0.64% |
| Shanghai Composite (SSEC) | 0.43% |
| MSCI Emerging Markets | 1.66% |
| MSCI World Index | -0.93% |
| Regional Markets | W-o-W |
|---|---|
| FTSE ASEA Pan African Index | -1.16% |
| JSE All Share | 0.89% |
| NSE All Share (NGSE) | -0.08% |
| DSEI (Tanzania) | 0.47% |
| ALSIUG (Uganda) | 0.00% |
Global stocks markets gained from the previous week. The MSCI World Index edged up by 1.52%, while the MSCI Emerging Markets declined by 1.33%. In the USA, DJI and S&P 500 soared by 2.29% and 1.25%. In Europe, STOXX Europe 600 appreciated by 1.60% and the FTSE 100 increased after subsequent declines by 1.60%. China’s Shanghai Composite decreased by 5.00%. Utilities, real estate and healthcare indexes were the strongest gainers on S&P as investors weighed the prospects of more fiscal stimulus.
On the regional front, the FTSE ASEA Pan African index decreased by 1.16%. The JSE All Share gained 0.89%, Nigeria’s NSE All Share dipped again by 0.08%. Within the EAC, Tanzania’s DSEI increased marginally by 0.47% and Uganda’s ALSIUG remained constant.
On the global commodities market, the oil futures experienced a decrease in prices due to an increase in Covid-19 cases and following OPEC announcement. Crude Oil WTI closed the week high with 0.10% while the ICE Brent Crude decreased by 0.28%. Gold futures prices increased by 0.59% to settle at $1,812.10 at the end of the week.
Week’s Highlights
- Co-operative Bank reduced its indirect ownership stake of 26.5% to 24.8% in CIC Insurance by selling shares to a group of SACCOs for a total of Sh 106.6 million. The Bank has 33.41% holdings in Co-operative Insurance Society Limited which is the majority shareholder of CIC Insurance Group Limited. The sell off follows the ongoing strategic transformation agenda at CIC Insurance.
- Shelter Afrique has plans to raise funds from the bonds market subject to its return to profitability in about two years. The funds will be used to fund new real estate projects. In 2011, Shelter Afrique raised Sh 2.9 billion in a bond issue and Sh 1 billion in 2009.
- Equity Bank Group is seeking Sh 50 billion from international financiers in the next three years as it seeks to boost its liquidity and capital positions. The Kenyan banking subsidiary is set to receive a Sh 5.3 billion loan from International Finance Corporation (IFC), a senior debt that will be used to support SMEs hurt by the global Covid-19 pandemic.
- Nairobi Securities Exchange (NSE) Limited nearly doubled its stake in Central Depositiry & Settlement Corporation CDSC Limited to 40.5 percent. The other majority shareholder of CSDC is The Capital Markets Challenge Fund Limited at 50%. The acquisition is for synergistic purposes aimed at strengthening the firm’s trading ecosystem.
- The value of Safaricom’s customer loyalty award, Bonga points hit Ksh 3.94 billion in the year to March 2020. This offered customers an opportunity to redeem the award for food and household items. This was a rise from the previous year’s level of Sh 3.85 billion. About one billion points valued at Sh 301 million were redeemed in the two months to June 4.
- Petrol, diesel and kerosene prices increased by Sh 11.38, Sh 17.30 and Sh 2.98 to new prices of Sh 100.48, Sh 91.87 and Sh 65.45 respectively. The increase was linked to increase in price on imported fuel and the new tax levy in the Finance Bill 2020.
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