Stock market stays calm in the first day of trading

A strong foreign investor appetite for shares continued Monday in spite of Saturday’s Westgate Mall terrorist attack. FILE 

By CHARLES MWANIKI,

 

In Summary

• The shilling opened the day at 87.50/60 slightly lower than Friday’s closing price
• It later gained slightly to 87.40/60 in cautious trading marked by low volumes.
• A strong foreign investor appetite for shares continued Monday in spite of Saturday’s terrorist attach

Kenyan money and equities markets stayed relatively stable on the first day of trading since Saturday’s terrorist attack on the Westgate Shopping Mall in Nairobi.

The shilling opened the day at 87.50/60 slightly lower than Friday’s closing price, but later gained slightly to 87.40/60 in cautious trading marked by low volumes.

Equities retained strong foreign investor interest even though lower local investor activity saw the NSE 20 share index shed 12 points to close at 4739 points on low trading volumes.

Market watchers said that while some slight shock was expected from the weekend’s events, it had turned out to be very minimal during Monday’s trading and that key fundamentals were expected to hold steady in the event of a quick end to the hostage crisis.

The shilling had closed last week’s trading on an upward trajectory against the dollar with commercial banks quoting at an average of 87.35/45.

On Monday, the Central Bank’s indicative rates quoted the shilling at 87.41 to the dollar, only three cents down on Friday’s mean of 87.38.

“The shilling was bruised by the weekend’s events, and shed some of last week’s gains on geo-political concerns but the currency, however, recovered in the afternoon,” said Commercial Bank of Africa senior dealer Joshua Anene.

Market observers said they do not expect the shilling to deviate from last week’s trend, especially with the expected inflows from foreigners taking up the 12-year Sh20 billion infrastructure bond.

Supply of the shillings in the market had also tightened on account of last week’s payment of the latest instalment of corporate tax by local companies.

In the equities market, a strong foreign investor appetite for shares continued Monday in spite of Saturday’s terrorist attack.

Investor interest remained concentrated around the blue chip counters of Safaricom and East African Breweries Limited (EABL).

The market has been on a recovery mode since the beginning of the year pushing capitalisation to Sh1.752 trillion on Friday.

“The majority of foreign investors remained active in the market today (Monday), outnumbering locals. EABL and Safaricom led in terms of foreign demand keeping the market fluctuation in check,” said Kestrel Capital markets analyst Kuria Kamau.

Safaricom, which touched its all time high closing price ofSh8.50 on Friday, slightly retreated to Sh8.35 in Monday’s trading while EABL remained unchanged at Sh304 per share.

Major bank stocks such as Equity and KCB gained 50 cents before a 25 cents decline to close at Sh34.25 and Sh44.75 respectively.