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Daily Market Report – 6th July 2020


Faida Research - July 7, 2020 - 0 comments

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Market Commentary:

  • The All Share Index retreated by 1.1% partly attributed to price decline on Safaricom (-1.9% to KES 29.10). Activity on the counter accounted for 48.1% of the day’s traded value. The NSE 20 Index however gained by 0.2% to close the day at 1,949.12. Equity turnover increased by 266.6% to KES 553.4 million as the number of shares traded increased by 257.6% to 22.2 million. Foreign investors were net sellers with 92.5% of the day’s sales against 49.6% of the day’s purchases with notable foreign sell side activity on Safaricom and EABL.

 

News Highlights:

Government opts for a Phased Re-opening

  The government has lifted restrictions on movement in and out of the Nairobi Metropolitan Area, Mandera and Mombasa counties as part of a phased reopening of the country.
 However, the nationwide dusk to dawn curfew (9:00 PM – 4:00 AM) and restrictions on public gatherings will remain in place for another 30 days.
 According to the government, although the irreducible minimums were yet to be met, the country had reached a reasonable level of preparedness to allow a phased reopening.
 The spread of the disease will be monitored over the next 21 days and should the situation worsen, the cessation of movement in the aforementioned areas will be reinstated.
 Some of the other initiatives announced as part of the re-opening included (i) Phased reopening of places of worship with only 100 participants allowed and restriction of congregants under 13 years or above 58 years and other vulnerable/at risk groups (ii) Resumption of local air travel on 15th July while international air travel shall resume from 1st August 2020 (iii) A notification on the resumption of the 2020 Academic calendar to be given by 7th July 2020.

Commentary
 The easing of the travel restrictions is a welcome move for households and businesses. We note that this however increases the risk of spread of the disease.

 

Recommendations:

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

Hold- Safaricom

Sell- Stanchart, Bamburi, HF

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