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Market Report – 9th July 2021


Faida Research - July 12, 2021 - 0 comments

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Feature of the week:

CBK Invites Bids for FXD1/2012/15 and FXD1/2018/15 (Re-opened) and FXD2/2019/15 Treasury Bonds

 

  • The Central Bank of Kenya (CBK), acting in its capacity as fiscal agent for the Republic of Kenya, has invited bids for two re-opened 15 year treasury bonds FXD1/2012/15 and FXD2/2019/15 and a newly issued FXD1/2021/25 bond with the intention of raising KES 60.0 billion for budgetary support.
  • The features of the bonds are shown in the table below:
  FXD1/2012/15 FXD1/2018/15 FXD1/2021/25
Amount KES 60.0 billion
Tenor 6.2 years 11.9 years 24.9 years
Coupon rate 11.000% 12.650% 13.924%
Taxation 10.0% 10.0% 10.0%
Period of sale 28/06/2021 to 13/07/2021
Redemption date 06/09/2027 09/05/2033 09/04/2046

Source: CBK

  • We recommend bidding as follows:
  • FXD1/2012/15: 11.50% to 11.60% (non-aggressive): 11.70% to 11.90% (aggressive)
  • FXD1/2018/15: 12.40% to 12.60% (non-aggressive): 12.70% to 12.90% (aggressive)
  • FXD1/2021/25: 13.40% to 13.50% (non-aggressive): 13.60% to 13.80% (aggressive)

Equities Market Summary:

Nairobi Securities Exchange Performance

The All Share Index (NASI) and the NSE 20 Share Index rose by 1.0% and 1.2% to close the week at 175.22 and 1,951.41 respectively. Market turnover rose by 6.0% to KES 2.7 billion while the volume of shares traded grew by 1.2% to 83.1 million shares. There were notable price gains on CIC (41.3% w/w to KES 3.39), KCB (7.1% w/w to KES 45.50), Absa (6.9% w/w to KES 10.05), Equity (4.9% w/w to KES 49.00), Britam (4.5% w/w to KES 7.50), Jubilee (3.9% w/w to KES 390.00) and Centum (3.6% w/w to KES 17.15). The gain on CIC comes after the company appointed Nelson Kuria, a former CEO of CIC, as the new chairman of the board. We could see some profit taking on some of these counters over the coming weeks which may lead to slight pull back or a weaker upward momentum.

 

Recommendations:

EABL – Long term buy

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