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Daily Market Report – 30th June 2020


Faida Research - July 1, 2020 - 0 comments

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Market Commentary:

  • The All Share Index retreated by 0.8% to close at 137.68. We attribute this to price declines in large cap counters, notably EABL (-4.6% to KES 162.50), Equity (-1.1% to KES 34.70) and Safaricom (-0.9% to KES 28.65). This was on the back of foreign sell-side activity.
  • Overall, foreign investors were net sellers with 84.4% of the day’s sales against 31.7% of the day’s purchases. NSE 20 also marginally eased by 0.5% as majority of the counters recorded prices declines. Equity turnover increased by 41.7% to KES 359.0 million as the number of shares traded increased by 82.0% to 15.5 million. Top mover of the da was Safaricom with 8.3 million shares traded (66.4% of the day’s traded value).

 

News Highlights:

Britam Targets Retail Clients in Asset Management Growth

 Britam Group is targeting the retail sector with an aim to grow its asset management business under its subsidiary Britam Asset Managers.
 According to management, the retail sector offers higher margins and will complement revenues from its institutional clients where margins are low.
 The group’s asset management subsidiary offers clients investment advisory and fund management services. The subsidiary invests clients’ savings and pensions over time at a commission.
 Assets under the subsidiary are stated to have been growing; primarily driven by pensions and collective investments, however margins remain thin.

Commentary
 We note that with reduced institutional margins it is important that asset management firms are innovative and we opine that this is a positive step for Britam towards boosting margins.
 We however recognize that increasing the contribution of assets under management from the retail segment could be a daunting task just like micro-insurance. However, with technology (particularly the mobile technology), Britam could see some success.

 

Recommendations:

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

Hold- Safaricom

Sell- Stanchart, Bamburi, HF

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