The current bear run at the market has two sides to it: “On one hand, we
have stocks, which are not exciting investors despite news that would
otherwise propel their share price upwards, on the other, we have an
opportunity for value medium to long-term investors to take position as
the bargained shares persist. PHOTO | FILE
NSE: The Nairobi Securities Exchange has been on a bear trend in the past week.
In
fact, since the beginning of the year, the NSE 20-Share Index has lost a
collective 5.5 per cent to 4,835.75 points in contrast to the 5,117.43
points recorded in January.
According to the head of
Investax Capital Ndindi Nyoro, the current bear position at the market
has two sides to it: “On one hand, we have stocks such as Equity Bank,
which are not exciting investors despite news that would otherwise
propel their share price upwards such as the buy-out of a bank in DR
Congo,” he says.
“On the other, we have an opportunity for value medium to long-term investors to take position as the bargained shares persist.”
SAFARICOM:
Last week, Safaricom dropped from Sh17 to a low of Sh15 per share. On
Friday, though, the counter pulled itself from the woodworks, rallying
to Sh16.15 apiece.
Within the week,
the telco recorded major volumes that on Wednesday’s trading stood at 64
million. Ironically, at some point during the day’s trading, the
counter experienced zero demand. Three hours into trading on Friday,
Safaricom moved 30 million shares.
According
to Kevin Tuitoek, a research analyst at Genghis Capital, Safaricom has
witnessed increased foreign participation. “A price increment was
expected after the record Sh32 billion profit. However, this has been
countered by exit of foreign investors and muted demand from local
ones,” he notes, adding that the dip could have been as a result of
investors waiting to see how far the counter could fall.
“This
drop is temporary. The counter is intact in value and remains a good
investment. It provided vantage points for investors and it will prop up
towards the highs of Sh17.”
Mr Tuitoek is nonetheless quick to note that the rise will also be determined by the performance of the overall market.
FLAME TREE: This
stock has been a prominent in both the gainers and losers pack in the
past week. According to Mr Tuitoek, the stock is still in the price
discovery position.
“The rise and
fall has largely depended on investor sentiments regarding its position
after the acquisition of four food and snack brands from Chirac,” he
says. On Friday, for instance, the counter opened at Sh8.70 per share
from Thursday’s closing price of Sh8.15 and rose to a high of Sh8.90 per
share.
“The uptake of the stock,
though, could be positive based on the success of its diversification
and expansion,” notes Mr Tuitoek.
KENYA AIRWAYS: On
Thursday, Kenya Airways received a Sh4.2 billion loan from the Treasury
to help it ease its financial woes. However, according to Mr Nyoro, the
bailout is a case of too little too late. “The company is struggling
with debts spanning close to a billion dollars, turning the Sh4.2
billion loan into a drop in the ocean on one hand and increasing its
debt burden on the other,” he says. “It’s not a share worth taking a
position.”
Currently, the national
carrier is expecting to make a loss of not less than 25 per cent of its
previous year ended March 2014, in which it posted a net loss of Sh7.8
billion and loss per share of Sh6.35. Its results are due for release
not later than next month. On Friday, the counter opened at Sh7.15 after
closing at Sh7.15 the previous day. Over the past one year, the
national carrier has traded at a low of Sh6.40 per share and a high of
Sh12.60.
No comments :
Post a Comment