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Market Report – 1st October 2021


Faida Research - October 12, 2021 - 0 comments

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Feature of the week:

Inflation Rises to 6.9% for the Month of September

Inflation rate for September rose to 6.9% compared to 4.2% in September 2020 and 6.5% the previous month. This was largely on account of rising cost of food, fuel and electricity, the main contributors to the changes in consumer price indices. Prices of food and non-alcoholic beverages rose by 10.6% with increases in most food items attributed to dry weather conditions. Transport rose by 9.2% on account of increased fuel prices while housing, water, electricity, gas and other fuels rose by 6.1%.

We expect inflationary pressures to remain elevated due to i) sustained weather conditions ii)spike in fuel prices countrywide. We however expect some relief in the prices of electricity with the anticipated reduction in cost of electricity by 33% over the next few months due to a reduction of tariffs from Kshs. 24 per KW to Kshs. 16 per KW.

Equities Market Summary:

Nairobi Securities Exchange Performance

The All Share Index increased by 1.9% w-o-w to close the week at 181.23, mainly attributed to Safaricom’ s w-o-w price increase (3.3% to KES 43.20). The NSE20 Index declined marginally, -0.1% to 2.038.08. Equity turnover declined by 49.5% to KES 1.6 billion compared to KES 3.2 billion the previous week while the volume traded declined by 21.5% to 56.8 million. Notably, NMG declined by 1.5% w-o-w to KES 23.00 following the closing of the share buyback program the previous week. In the coming week, we expect price stability. In the coming week, we expect price stability.

 

Recommendations:

KCB – Neutral

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