- The All Share Index (NASI) gained for the third consecutive day this week (+1.8% week to date) to close the day at 139.59. We attribute this mainly to Safaricom (+1.7%), EABL (+0.5%), Co-op Bank (+2.4%). Other notable gainers included Standard Chartered Bank (+6.3%) and Centum (+4.6%).
- The NSE 20 index however retreated marginally by 0.3% to close the day at 1931.18. We note that majority of the constituent counters lost during the day which may explain the decline in the index. Daily turnover rose by 41.2% to KES 596.0 million. Foreign investor activity was biased to the sell side at 65.6% compared to the buy side at 44.2%. However, local participation increased to 45.1% from 27.1% in the previous day.
Inflation Eases to 5.5% in May 2020
Kenya’s annual headline inflation eased marginally to 5.5% in May from 5.6% in April 2020.
The food and non-alcoholic drinks index grew by 0.9% m/m. This was attributed to a rise in the price of food items that offset the decline in others.
Some of the notable price increases include: onions (+4.5 m/m), carrots (+3.3% m/m), oranges (+2.6% m/m) and spinach (+2.2% m/m). We note however that the May m/m growth in the index was much lower than that recorded in April (1.8% m/m).
The transport index rose marginally by 0.02% m/m despite prices of diesel and petrol prices falling by 19.1% and 9.8% respectively during the month as the Energy and Petroleum Authority (EPRA) lowered prices in its May fuel review. However, the May m/m growth in the index was also lower than the April m/m growth (0.1%).
The housing, water, electricity, gas and other fuels’ index increased by 0.8% predominantly due to a 3.2% m/m rise in the price of kerosene. Globally, weaker demand for oil has seen international prices for crude oil (and processed products) decline significantly.
We expect inflation to remain within the CBK’s band 5% +/- 2.5% as demand pressures remain muted (this may signal lower economic activity if it is sustained).
Long Term Buy- KCB, Equity, Absa, Stanbic, NCBA
Sell- Stanchart, Bamburi, HF