Foreign Exchange Reserves
The usable foreign exchange reserves stood at USD 7,022 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 132.92, KES 167.96 and KES 144.03 respectively. The observed appreciation against the Dollar is attributed to the increased foreign inflows.
| Currency | YTD Change | W-o-W Change |
|---|---|---|
| Dollar | -15.33% | -1.65% |
| Sterling Pound | -15.96% | -2.54% |
| Euro | -17.05% | -2.22% |
Liquidity
Liquidity in the money markets tightened, with the average inter-bank rate increasing from 13.18% to 13.45%, as tax remittances more than offset government payments. Open market operations remained active.
| Liquidity | Week (previous) | Week (ending) |
|---|---|---|
| Interbank rate | 13.18% | 13.45% |
| Interbank volume (billion) | 29.85 | 37.49 |
| Commercial banks’ excess reserves (billion) | 16.10 | 23.30 |
Fixed Income
T-Bills
T-Bills were over-subscribed during the week, with the overall subscription rate increasing to 102.83%, up from 93.47% recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 291.20% while the 182-day T-Bill and 364-day T-Bill had subscription rates of 40.87% and 89.44% respectively. The acceptance rate decreased by 5.36% to close the week at 83.73%.
T-Bonds
In the secondary bond market, there was a lower demand for the week’s bond offers. Bond turnover decreased by 25.82%, from KES 34.02 billion in the previous week to KES 25.23 billion. Total bond deals increased by 1.89% from 687 in the previous week to 700.
In the primary bond market, CBK released auction results for the re-opened 5-year FXD1/2024/005 and the new 10-year FXD1/2024/010 which sought to raise KES 40.0 billion. The issues received bids worth KES 59.73 billion, representing a subscription rate of 149.33%. Of these, KES 22.61 billion worth of bids were accepted at a weighted average rate of 18.41% and 16.52% respectively.
Eurobonds
In the international market, yields on Kenya’s Eurobonds decreased by an average of 0.32% compared to the previous week, 0.59% month-to-date and 0.91% year-to-date. The yields on the 10-year Eurobonds for Angola also increased while that of Zambia decreased. Below is a summary analysis of performance for individual bonds.
| Bond | YTD Change | M-o-M Change | W-o-W Change |
|---|---|---|---|
| 2018 10-Year Issue | -1.27% | -0.74% | -0.35% |
| 2018 30-Year Issue | -0.42% | -0.47% | -0.24% |
| 2019 7-Year Issue | -1.87% | -0.75% | -0.45% |
| 2019 12-Year Issue | -0.69% | -0.56% | -0.33% |
| 2021 13-Year Issue | -0.30% | -0.48% | -0.28% |
| 2024 6-Year Issue | -0.94% | -0.55% | -0.25% |
Equities
NASI, NSE 20, NSE 25 and NSE 10 settled 5.74%, 3.02%, 5.13% and 5.49% higher compared to the previous week, bringing the year-to-date performance to 17.06%, 11.02%, 19.00% and 20.61% respectively. Market capitalization also gained 5.74% from the previous week to close at KES 1.68 trillion, recording a year-to-date increase of 17.06%. The performance was driven by gains recorded by large-cap stocks such as Safaricom, KCB, Equity and Co-operative of 10.20%, 6.46%, 6.46% and 6.05% respectively.
The Banking sector had shares worth KES 1.7B transacted which accounted for 66.67% of the week’s traded value. Manufacturing and Allied sectors had shares worth KES 80M transacted which represented 3.15% and Safaricom, with shares worth KES 719.9B transacted represented 28.30% of the week’s traded value.
Top Gainers and Losers in the Equities Markets
| Top Gainers | YTD Change | W-o-W |
|---|---|---|
| Safaricom | 21.82% | 10.20% |
| Britam | 9.34% | 8.08% |
| Kenya Power | 19.29% | 7.74% |
| KCB | 16.40% | 6.46% |
| Equity | 32.60% | 6.46% |
| Losers | YTD Change | W-o-W |
|---|---|---|
| EA Cables | -11.22% | -13.00% |
| Flame Tree | -9.65% | -10.43% |
| Sanlam | 5.00% | -9.74% |
| Liberty | 30.05% | -8.73% |
| BK Group | -13.46% | -8.71% |
Alternative Investments
| Losers | Week (previous) | Week (ending) | % Change |
|---|---|---|---|
| Derivatives Turnover (million) | 1.53 | 20.30 | 1,228.12% |
| Derivatives Contracts | 18.00 | 32.00 | 77.78% |
| I-REIT Turnover (million) | 0.00 | 0.00 | 0.00 |
| I-REIT deals | 0.00 | 0.00 | 0.00 |
Global and Regional Markets
| Global Markets | YTD Change | W-o-W |
|---|---|---|
| S&P 500 | 10.36% | 2.29% |
| Dow Jones Industrial Average (DJI) | 4.67% | 1.97% |
| FTSE 100 (FTSE) | 2.71% | 2.63% |
| STOXX Europe 600 | 6.51% | 0.96% |
| Shanghai Composite (SSEC) | 2.94% | -0.17% |
| MSCI Emerging Markets Index | 1.43% | 0.44% |
| MSCI World Index | 8.17% | 1.94% |
| Continental Markets | YTD Change | W-o-W |
|---|---|---|
| FTSE ASEA Pan African Index | -5.58% | 1.58% |
| JSE All Share | -3.34% | 0.53% |
| NSE All Share (NGSE) | 37.71% | -0.42% |
| DSEI (Tanzania) | 0.73% | 0.35% |
| ALSIUG (Uganda) | 16.64% | 5.70% |
The US stock market closed the week in the green zone, boosted by a continued rally and shifting expectations for the Federal Reserve policy. The Fed’s recent signals of delayed rate hikes fueled investor optimism, pushing stock indices to new highs.
The European market closed the week on an upward trajectory, as investors assessed the dovish signals from central banks, particularly the Bank of England. Governor Bailey hinted at potential rate cuts later this year, boosting overall market sentiment.
Asian stocks closed the week in the red zone, pressured by weak corporate earnings in Hong Kong, particularly in the tech sector, which fell 3.5%. Investor sentiment was further dampened by concerns over China’s economic recovery, fueled by rising inflation that hit a 10-month high.
Week’s Highlights
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