Market Report – 5th March 2021

Market Commentary:

• The All Share Index retreated by 2.2% w/w to 161.67. This was largely attributed to w/w price decline in Safaricom (-3.7% to KES 37.30) on the back of profit taking activity, following price gains in the recent weeks. Investors should note that today (5th March 2021) was the book closure date for the company’s KES 0.45 interim dividend. The NSE 20 Index however edged up by 1.3% w/w to 1,941.39 as majority of the constituent counters posted price gains.
• Notably, Nation Media Group (NMG), which had announced intentions to buy back its shares (up to 10.0% of issued shares), gained by 57.5% w/w to close the week at KES 25.35 (year-to-date +64.1%). We expect the counter to extend its rally. Overall market turnover and volume of shares traded for the week declined by 32.5% w/w and 15.8% w/w to KES 2.1 billion and 67.7 million respectively. In the coming week, we expect activity in the banking sector to pick up as banks release their FY2020 results (Stanbic Holdings has already released its FY2020 results showing an 18.6% y/y decline in earnings to KES 5.2 billion — declaring a DPS of KES 3.80).

News Highlights:

CBK Invites Bids for Re-opened FXD1/2019/10 and FXD2/2018/20 Treasury Bonds

• The Central Bank of Kenya (CBK), acting in its capacity as fiscal agent for the Republic of Kenya, has invited bids for the re-opened FXD1/2019/10 and FXD2/2018/20 with the intention of raising KES 50.0 billion for budgetary support.
• The features of the bonds are shown in the table below:

Source: CBK

• We recommend bidding as follows:
  i. FXD1/2019/10
• Aggressive bids – 12.50% to 12.95%
• Non-aggressive – 12.10% to 12.40%

        ii. FXD2/2018/20

• Aggressive bids – 13.40% to 13.70%
• Non-aggressive – 13.10% to 13.30%

Recommendations:

Kenya Re – HOLD