Equity stock rises slightly after announcement on MVNO

Money Markets

Equity Bank share notched 1.3 per cent higher to close at Sh40.25. Photo/FILE 

By JOHN GACHIRI

In Summary

• Equity share price up one and a third per cent traded between Sh39.75 and Sh39.75 closing at an average price of Sh40.25 after the strategy was announced.

The Equity Bank share Monday witnessed a slight bump after the firm’s management made public details of what it intends to do with its new mobile license.

Equity share price up one and a third per cent traded between Sh39.75 and Sh39.75 closing at an average price of Sh40.25 after the strategy was announced.

Analysts said the market warmed to the bank’s announcement that it would use the licence to fight for the fast growing cashless market with its newly acquired mobile virtual network operator (MVNO) license. It is the only bank to have been issued with the permit so far.

“Having unveiled the strategy for its MVNO at the start of trading, Equity Bank notched 1.3 per cent higher to close at Sh40.25,” said a market report by Standard Investment Bank.

At Sh40.25 the bank’s share price is not far from its 52-week high of Sh42.25.

There were 685,600 shares of the lender traded. Equity said it would issue SIM cards that would act as debit cards and provide an avenue to channel all its products.

READ: Equity seeks to halve transaction costs with mobile licence

Overall the market continued to cool off as select large caps saw their price edge down.

Mumias, Barclays Bank and EABL were some of the shares whose prices dropped in Monday trading, which pulled down the Nairobi Securities Exchange (NSE) 20-Share Index.

“NSE 20 Share Index shed 25.66 points to close at 4,925.58 points due to price drops on counters such as Mumias, Barclays Bank and EABL that closed at Sh3.55 (-4.05 per cent), Sh16.65 (-2.06 per cent) and Sh271.00 (2.87 per cent) respectively,” said a market report by Sterling Capital.

Turnover, however, rose to Sh634.9 million from Friday’s Sh482 million while market capitalisation remained at the Sh2.08 trillion level.

Liberty Insurance share price dropped to Sh19.10 from Sh19.70, a 3.1 per cent drop, as the price adjusted after its register closed for its dividend payout.

Books closure for dividends and the conclusion of first quarter announcements have put brakes on the NSE share price rallies in the last one month.

Companies are also raising funds through rights issues, which is expected to result in some stock prices shedding value. Uchumi, DTB, National Bank and CIC Insurance have all made plans to ask shareholders to add more capital during this financial year.

Britam on the other hand plans to raise capital through a corporate bond to be issued once it gets approval from the Capital Markets Authority.