NSE nears 13-month high on banking stocks surge

Investors at the stock market have wiped out losses suffered over the last one year as share valuation rose to over 12-month highs.

Market capitalisation hit Sh2.435 trillion by close of trading yesterday, a level last seen in September last year when the value of Nairobi Securities Exchange cap stood at Sh2.44 trillion.

Extended rally by banking stocks and revenue windfall expected from Safaricom—which releases half-year results today—have sent the NSE 20 Share Index rallying to 2643 points.

After three quarters of a decline this year, the market has found its tempo, with investors gaining Sh246 billion in paper wealth in the last quarter of the year, having ended September at a capitalisation of Sh2.189 trillion

Banking stocks were heavily traded, led by KCB with 15 million shares, pushing the lender’s price to Sh51.75 which is the highest since April 2018. Equity Bank traded 14.4 million shares to close at Sh46.5, a level last seen in August 2018.

Safaricom rallied to close at 19-month high of Sh29.75 ahead of the announcements, with analysts picking the counter for expected surge in profitability.

Amicable resolution of Bob Collymore’s replacement where the first Kenyan, Peter Ndegwa, was chosen has given the telco new confidence as it continues to account for almost half of the bourse’s capitalisation at Sh1.19 trillion.

“We expect a 10 per cent growth in EPS while revenue is likely to record a seven percent growth driven by increased M-Pesa and fixed data,” AIB Capital said.

The last quarter of the year has seen the market turn around following months of a bear run, following promising push to repeal the rate cap turning banking counters bullish.

End-month market capitalisation for quarter three 2019 was Sh2.189 trillion compared to Sh2.278 trillion recorded in the previous quarter, indicating a 3.90 per cent decrease.