The All Share Index eased by 0.3% to close the day at 130.21. This was partly attributed to Safaricom declining by 0.7% to KES close (VWAP) at 27.50. Activity on the counter accounted for 92.1% of the day’s traded value. The NSE 20 Index however gained by 0.2% to close at 1,761.43. Market turnover rose to KES 481.6 million from KES 211.2 million in the previous trading session while the number of shares traded increased by 79.2% to 18.5 million. Bamburi (+7.0% to KES 26.62), HF Group (+5.6% to KES 3.93) and Standard Chartered (+5.4% to KES 160.00) emerged as the top 3 gainers while Scangroup (-8.7% to KES 9.06), EA Cables (-8.1% to KES 1.93) and Sameer (-6.6% to KES 3.25) emerged as the top 3 losers. Foreign investors dominated today’s trading activity (89.0% participation).
Limuru Tea Lowers after Tax Loss in 1H2020
Limuru Tea posted an after-tax loss of KES 11.1 million for 1H2020, an improvement from a loss of KES 18.2 million reported in 1H2019. The improvement was attributed to top-line growth as well as effective cost management initiatives.
Turnover edged up by 72.5% y/y to KES 50.6 million (1H2019: KES 29.4 million). This was attributed to higher sales volumes which offset the adverse impact of declining market prices.
According to management, the company produced 2,172 tons of green leaf which was in turn manufactured into 458 tons of black tea.
Management expects depressed market prices to continue to pose a risk to the business performance and is focusing on volume growth, cost management and other strategic initiatives to mitigate the market impact.
The Covid-19 pandemic is expected to remain a risk to the operations of the business.
As countries open up and ease restrictions, we expect this to offer some reprieve. However, for the most part, demand and tea prices will be affected by the pandemic.
Long Term Buy- KCB, Equity, Absa, Stanbic, NCBA
Sell- Stanchart, Bamburi, HF