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Daily Market Report – 3rd August 2020

- August 4, 2020 - 0 comments

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Market Commentary:

  • The All Share Index and NSE 20 Index eased by 2.7% and 0.4% from the previous trading session to close the day at 129.61 and 1,797.67 respectively. This was characterized by price declines across majority of the counters as selling pressure persisted. Notably, Safaricom declined by 4.6% (to KES 26.85), as the counter went “ex-dividend” after the books closed for the FY2019/20 dividend. Activity on the counter accounted for 84.0% of the day’s traded value. Activity in the banking sector was largely sell-side, with price declines across majority of the counters. Overall, foreign investors dominated trading activity on both the sell side (94.7%) and buy side (87.8%).


News Highlights:

Inflation Declines to 4.4% in July 2020

 Kenya’s annual headline inflation eased further to 4.4% in July from 4.6% in June 2020.
 The food and non-alcoholic drinks index declined by 0.8% m/m as the price decreases of some food items outweighed the increases in others. Some of the notable price declines include: tomatoes (-5.5% m/m), Irish potatoes (-4.1% m/m), spinach (-3.2% m/m), onions (-3.1% m/m) and kale (-2.6% m/m). Price increases on the other hand included sugar (+3.7% m/m) and meat (+0.6% m/m).
 The housing, water, electricity, gas and other fuels’ index decreased by 0.4% m/m owing to lower costs of water vendor services, house maintenance and some house rents. The cost of electricity and kerosene however rose by 0.5% m/m and 4.1% m/m respectively.
 The transport index grew by 4.0% m/m predominantly due to an increase in the pump prices of diesel and petrol by 22.3% m/m and 12.2% m/m respectively.

 Although we expect some inflationary pressures from higher oil prices, we expect inflationary pressures to remain within the CBK’s band 5% (+/-2.5%).



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

Hold- Safaricom

Sell- Stanchart, Bamburi, HF

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