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Daily Market Report – 22nd July 2020


Faida Research - July 22, 2020 - 0 comments

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Market Commentary:

  • The All Share Index gained by 0.2% to close the day at 131.03. This was mainly attributed to price gain on Safaricom (0.6% to KES 26.85) on the back of foreign buying interest. The counter traded 21.4 million shares accounting for 53.5% of the day’s traded value (total market turnover +6.0 5to KES 1.0 billion).
  • The NSE 20 share index however retreated by 1.0% to close the day at 1,886.45 on the back of price declines on majority of the constituent counters. Foreign sell side pressure persisted in today’s trading session with foreign investor sales at 93.6% of total sales (particularly on Equity and KCB) against foreign investor purchases of 43.8%.

 

News Highlights:

KenGen Considers Installing Floating Solar Plants

 KenGen is considering installing floating solar plants in 3 of its hydropower dams. This is expected to be a cheaper option for renewable energy than land-based solar farms.
 Multiconsult, a Norwegian firm, will carry out a pre-feasibility study (funded by KfW – a German development bank) for floating solar PV (F-PV) potential on Kamburu, Kiambere and Turkwell reservoirs.
 The study will involve a review of the power infrastructure at the sites, the hydro turbines characteristics, operations of the reservoirs, water flow patterns and power evacuation in the grid followed by recommendations on the integration of floating solar plant in hybrid operation with the existing infrastructure.
 In addition, the study will assess the social, environmental and climate aspects and associated risks.
 According to Multiconsult, the use of dams with floating solar PV (FPV) facilitates management of power and water usage in an
appropriate and cost effective way. Moreover, it ensures less evaporation from the reservoir which saves water. This could also offset the loss of electricity production due to variation in water levels.

Commentary

 In as much as the successful implementation of the floating solar plants will be a step in the right direction (in terms of being more cost effective) for KenGen, we opine that the impact of the floating solar plants will not be significant in terms of electricity generation and cost reduction – at least in the short-term.

 

Recommendations:

Long Term Buy- KCB, Equity, Absa, Stanbic, NCBA

Hold- Safaricom

Sell- Stanchart, Bamburi, HF

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