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Daily Market Report – 10th June 2020


Faida Research - June 10, 2020 - 0 comments

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Market Commentary:

  • The All Share and NSE 20 Indices gained by 0.7% and 0.2% to close the day at 141.04 and 1,986.48 respectively. Equity turnover increased by 47.1% to KES 716.7million. Notable gainers for the day were Britam (+9.5% driven by foreign demand) and Stanbic (+6.8%). Safaricom gained 1.0%, accounting for 74.0% of the day’s traded value. Foreign investors emerged net buyers with foreign buys at 85.4% against foreign sales at 47.5%. We expect the pickup in activity to sustain for the rest of the week.

 

News Highlights:

Kenya Airways Banks on Cargo with UAE Route

 According to the Business Daily, Kenya Airways (KQ) has started cargo flights to the United Arab Emirates (UAE) in a bid to grow revenues via freight, as passenger flights remain restricted owing to the Covid-19 pandemic.
 KQ will run two weekly flights but may increase if demand grows
 The cargo flights will primarily transport meat products such as tropical fish, fresh fruit, flowers and general cargo to Sharjah International Airport and import general cargo and high-tech goods.
 The airline has been employing strategies aimed at business turnaround and gaining competitive advantage.
 According to management, the airline was mainly moving personal protective equipment (PPE) in April. However, with time, demand has declined owing to increased local production.

Commentary
 As noted previously, the airline continues to face the challenge of increased competition and high operating and financial leverage.
 Without a clear long-term turnaround strategy, we recommend investors to keep away from the stock

 

Recommendations:

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

Hold- Safaricom

Sell- Stanchart, Bamburi, HF

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