NSE cools off as investors cash in on peak counters

A futures exchange ordinarily helps businesses to mitigate against future losses arising from fluctuations in prices. FILE 

By John Gachiri

In Summary

• Analysts said that the market was expected to begin cooling as investors seek profitable exit from counters that have hit their peaks, some of which have been trading at 52-week highs.

The Nairobi Securities Exchange (NSE) continued to run out of steam for the second straight day as investors cashed in on investments made last year and in the first half of this month.

Both turnover and the NSE 20-Share Index fell in Tuesday’s trading.

Turnover dropped to Sh860 million from the previous session’s Sh1.29bn, while the NSE 20-Share Index lost 17.59 points to close at 5,078.13 points.

Analysts said that the market was expected to begin cooling as investors seek profitable exit from counters that have hit their peaks, some of which have been trading at 52-week highs.

“Profit taking on Safaricom continued, with the telco easing 2.4 per cent to Sh12.05. EABL retreated 1.4 per cent on weaker demand,” said Standard Investment Bank in the report.

Safaricom’ share price dropped by 2.4 per cent to Sh12.05 from Monday’s Sh12.35, having touched its 52-week high of Sh12.80 this year.

EABL closed at Sh279 from the previous day’s Sh283. Analysts also said that they expected investors to speculate on banking results ahead of their announcing of end of year results.

“Safaricom remained the most actively traded followed closely by banking stocks of which strategic investors are taking positions ahead of the release of 2013 performance results,” said a market report by Genghis Capital earlier in the week.

Market capitalisation dropped by Sh14.5 billion to close at Sh2.02 trillion from Sh2.035 trillion.

On the foreign currency front the shilling is expected to weaken slightly to between the Sh85.50 and Sh85.86 level due to end month demand for dollars.