Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 6,785 million (3.60 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 depreciated against the Dollar, the Sterling Pound and the Euro to exchange at KES 152.23, KES 188.96 and KES 165.30 respectively. The observed depreciation against the Dollar is attributed to a high demand from energy and commodity importers.

CurrencyYTD ChangeW-o-W Change
Dollar23.34%0.36%
Sterling Pound27.05%1.54%
Euro25.56%1.85%

Liquidity

Liquidity in the money markets marginally increased, with the average inter-bank rate decreasing from 11.22% to 11.08%, as government payments more than offset tax remittances. Remittance inflows totalled $355.62 million in October 2023, a 1.78% increase from $340.44 million in August 2023 and a 6.90% rise from $332.6 million in October 2022. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate11.22%11.08%
Interbank volume (billion)11.9425.29
Commercial banks’ excess reserves (billion)18.6016.80

Fixed Income

T-Bills

T-Bills remained over-subscribed during the week, with the overall subscription rate declining to 208.32%, down from 255.64% performance recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 942.71% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 93.97% and 28.91% respectively. The acceptance rate decreased by 9.05% to close the week at 90.68%.

T-Bonds

In the secondary bond market, there was a higher demand for the week’s bond offers. Bond turnover increased by 18.51% from KES 10.23 billion in the previous week to KES 12.13 billion. Total bond deals increased by 113.68% from 307 in the previous week to 656.

Eurobonds

In the international market, yields on Kenya’s Eurobonds decreased by an average of 0.30% compared to the previous week, a 0.53% month-to-date loss and a 1.43% year-to-date gain. The yields on the 10-year Eurobonds for Angola declined while that of Zambia increased. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2014 10-Year Issue1.18%-0.56%-1.37%
2018 10-Year Issue2.02%-0.56%-0.15%
2018 30-Year Issue0.77%-0.38%-0.04%
2019 7-Year Issue1.99%-0.62%-0.22%
2019 12-Year Issue1.21%-0.49%0.01%
2021 13-Year Issue1.40%-0.59%-0.05%
Equities

NASI, NSE 20, NSE 25 and NSE 10 settled 1.74%, 3.66%, 2.36% and 2.33% higher compared to the previous week, bringing the year-to-date performance to -28.93%, -12.14%, -24.57% and -8.34% respectively. Market capitalization also gained 1.74% from the previous week to close at KES 1.41 trillion, recording a year-to-date decline of -28.74%. The performance was driven by gains recorded by large-cap stocks such as KCB, Co-operative, Stanbic and ABSA of 20.56%, 8.92%, 3.47% and 2.79% respectively.

The Banking sector had shares worth KES 138.3M transacted which accounted for 31.36% of the week’s traded value, Manufacturing and Allied sector had shares worth KES 19.1M transacted which represented 4.35% and Safaricom, with shares worth KES 255M transacted represented 57.83% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
Bamburi2.19%28.44%
KCB19.35%20.56%
Coop-Bank11.60%8.92%
BK Group20.17%8.75%
Eaagads21.90%8.47%
LosersYTD ChangeW-o-W
NBV-38.58%-16.55%
Flame Tree7.27%-9.23%
Home Africa-11.76%-9.09%
HF Group10.16%-8.20%
EA Portland24.71%-5.78%

Alternative Investments

LosersWeek (previous)Week (ending)% Change
Derivatives Turnover (million)1.580.58-63.22%
Derivatives Contracts35.0011.00-68.57%
I-REIT Turnover (million)1.093.43214.27%
I-REIT deals23.0038.0065.22%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 50018.04%2.24%
Dow Jones Industrial Average (DJI)5.47%1.94%
FTSE 100 (FTSE)-0.66%1.95%
STOXX Europe 6004.98%2.82%
Shanghai Composite (SSEC)-1.99%0.51%
MSCI Emerging Markets Index1.45%2.97%
MSCI World Index14.77%2.91%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index1.26%-0.03%
JSE All Share-0.64%3.81%
NSE All Share (NGSE)37.83%0.37%
DSEI (Tanzania)-7.97%0.05%
ALSIUG (Uganda)-25.43%0.92%

The US stock market closed the week in the green zone, as investors were optimistic that the Fed may soon begin to cut interest rates. This optimism stems from recent data indicating a slowdown in inflation, suggesting that the Fed’s tightening cycle might be approaching its peak.

The European stock market closed the week on an upward trajectory, buoyed by gains in the financial and healthcare sectors, as investors bet that major central banks have concluded their interest rate hikes.

Asian stock markets closed the week in the green zone as well, fueled by optimism that the Federal Reserve’s monetary tightening cycle is nearing its conclusion and reports that China has intervened to stabilize inter-bank lending rates following an unexpected liquidity crunch last month.

On the global commodities markets, Crude Oil WTI and ICE Brent Crude closed the week 1.66% and 1.01% lower at $75.89 and $80.61 respectively. Gold futures prices settled 2.43% higher at $1984.70.

Week’s Highlights

  • The Energy and Petroleum Regulatory Authority (EPRA) released its latest monthly statement on the maximum retail prices of petroleum products, effective from 15th November 2023 to 14th December 2023. The pump price of super petrol remained unchanged at KES 217.36 per litre, while diesel and kerosene reduced by KES 2.00 per litre to KES 203.47 per litre and KES 203.06 per litre respectively.
  • The IMF has reached a staff-level agreement with Kenya on the sixth review of its economic program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements. This agreement includes an expansion of access under the EFF/ECF totalling 130.3% of the quota, equivalent to US$938 million. Additionally, the agreement encompasses the first review under the Resilience and Sustainability Facility (RSF). Upon approval by the IMF’s Executive Board, Kenya would gain immediate access to US$682.3 million, comprising funds from both the EFF/ECF augmentation and the first RSF review. This would increase total IMF financial support to Kenya under the EFF/ECF and RSF to US$2.68 billion.
  • October revenues reached 714.44 billion, marking a remarkable 98.67% increase from the previous month and surpassing the monthly prorated target by 27.79%. However, expenses exceeded revenue collections by KES 226 billion, signalling a fiscal deficit of 31.58% which was financed through external and internal borrowing by 30% and 70% respectively.
  • Kenya’s National Treasury appointed Citi Bank and Standard Bank as joint lead managers to explore potential international US dollar capital markets funding and liability management options for Kenya. This move is expected to broaden Kenya’s access to more favourable financing terms, reduce its dependence on domestic borrowing and foster economic growth.
  • The Ugandan Parliament passed the Petroleum Supplies Amendment Bill 2023 into law, granting the Uganda National Oil Company (UNOC) the monopoly to import all petroleum products into Uganda. This bill aims to end Uganda’s dependence on petroleum imports from Kenya and reduce costs. Under the new legislation, UNOC will be responsible for securing and importing all petroleum products required for Uganda’s domestic consumption.
  • The U.S. annual inflation rate eased to 3.2% in October 2023, down from 3.7% in both September and August and below market expectations of 3.3%. This was primarily driven by a 4.5% drop in energy costs, compared with a 0.5% decrease in September. Gasoline prices led to the energy decline, falling 5.3%, while utility (piped) gas service and fuel oil prices tumbled 15.8% and 21.4% respectively. Food prices, new vehicle prices and shelter prices rose by 3.3%, 1.9% and 6.7% respectively. The downward trend continued for used cars and trucks, with prices falling 7.1%. Additionally, the core CPI, which excludes volatile food and energy prices, increased by 4% on an annual basis and 0.2% on a monthly basis, below the market forecast of 4.1% and 0.3% respectively.
  • UK’s inflation rate decreased to 4.6% in October 2023, marking a significant decline from 6.7% in both September and August and falling short of market expectations of 4.8%. This represents the lowest inflation rate since October 2021 and is attributed in part to the recent reduction in energy prices following Ofgem’s decision to lower the cap on household bills. The cost of housing and utilities dropped 3.5% compared to 6.9% in September, with both gas and electricity costs experiencing the sharpest declines since January 1989. Additionally, food inflation decreased to 10.1%, marking the lowest level since June 2022. The core Consumer Price Index (CPI), which excludes volatile items such as food and energy, decreased to 5.7% in October 2023, marking the lowest level since March 2022. On a monthly basis, the overall CPI remained unchanged.
  • Japan’s trade deficit narrowed sharply to JPY 662.55 billion in October 2023, below market expectations of JPY 735.7 billion. This marked a substantial improvement from the previous year’s deficit of JPY 2,205.94 billion. Primarily driven by a 1.6% year-on-year increase in exports to JPY 9,147.07 billion, supported by strong demand from the US. Concurrently, imports declined by 12.5% to JPY 9,809.62 billion, marking the seventh consecutive month of decline due to reduced energy costs.

Get future reports

Please provide your details below to get future reports:

Reports subscription