Investors’ bet on bank stocks raises NSE trade volumes

 

Nairobi Securities Exchange trading floor. Equity Bank was in highest demand among the banking stocks with 8.86 million shares traded in the week. FILE  Nation Media Group

By CHARLES MWANIKI

Banking stocks made three out of the top five most traded counters at the stock market last week, as investors took position ahead of the announcement of half-year results, expected to gather pace starting on Monday.

Equity Bank was in highest demand among the banking stocks with 8.86 million shares traded in the week, and was the top mover in the market on Friday alone with 1.52 million shares traded.

KCB, which has overtaken Equity as the most valuable lender at the bourse, traded 6.76 million shares last week, ahead of Barclays which saw 4.94 million shares change hands.

KenolKobil recorded share price gains during the week following re-admission to the oil import chain, closing 5.36 per cent higher than the previous week’s pricing.

The week’s top gainer was Longhorn which climbed 18.33 per cent to close at Sh10.65 as the share benefited from limited supply.

Bank stocks, however, registered limited price movements despite of the heavy trading that was characterised by significant foreign investor demand, with CFC Stanbic the biggest gainer with a 3.05 per cent price rise in the week to close at Sh67.50.

The first listed commercial bank to release its half-year results on Monday morning will be Equity. Mortgage lender Housing Finance already announced its performance last week.

Analysts have said that expectation is that the earnings for the second quarter could be better than the first quarter numbers due to the absence of political risk that characterised the first three months of the year due to the general elections.

This had the effect of depressing the banks’ lending numbers. Coupled with the lower interest rates, the lower political risk of the second quarter should see the loan books expand, the analysts said.

The market was largely stable in the week, only losing 0.12 per cent to close at 4,801 points compared to the previous weeks closing mark of 4,807 points.

 In the currency market, the shilling closed the week on a cautious note with investors anticipating that the regulator might intervene again to stem a rapid drop against the dollar.

The local currency had closed the week ending July 19 trading at an average 87.05/15 in commercial banks following a CBK move to inject dollars into the market.

The regulator, however, held off from any intervention last week as the local currency slowed its decline against the dollar, closing the week at an average 87.25/45, a slight improvement from Thursday’s level of 87.20/60.

“The shilling improved slightly today mainly due to position consolidation by traders ahead of the weekend. We, however, expect the weakening trend to resume next week barring intervention from the regulator, since end-month dollar demand will be coming in,” said CBA senior dealer Joshua Anene.