Summary
- Ten out of the 12 listed banks have recorded a price gain this year, led by the large-cap stocks of Equity Holdings and KCB.
- This has given investors in the segment a gain of Sh39.4 billion in market capitalisation in the last three weeks, bringing their total market value to Sh664.4 billion.
- Lenders are due to release full-year results by end of March with share prices generally tending to rise ahead of the reportage as investors jostle for positions with an eye on dividends.
Bank stocks have been on an upward trend at the NSE this year on
higher investor demand driven by cheap valuations and an eye on
dividend yields ahead of full-year reporting.
Ten out of the 12 listed lenders have recorded a price gain this year, led by the large-cap stocks of Equity Holdings
and KCB
.
This has given investors in the segment a gain of Sh39.4 billion in
market capitalisation in the last three weeks, bringing their total
market value to Sh664.4 billion.
In contrast, the
lenders ended 2018 on a negative footing, where nine had a negative
price movement—eight by double digits in percentage terms — as they were
swept down by the bear run that gripped the market for most of the
year.
The resulting lower prices have been touted as attractive for
entry by investors looking to make a capital gain in the future, as well
as promising a higher dividend yield on the stocks once results are
announced since banks are expected to keep growing profits.
“We
have observed the uptick in share prices for a number of banks, which
has led to investors making some gains. Attractive valuations is one of
the key drivers that investors are looking out for in the market,” said
Kingdom Securities senior research analyst Mercyline Kyalo.
“With
the reporting season coming up, it could also be an indication that
investors may be wanting to lock in low prices ahead of the dividends,
as this translates to a higher dividend yield.” Listed lenders reported a
13.2 percent rise in cumulative net earnings for the nine months to
September 2018, at Sh73.8 billion, indicating that full-year earnings
could top those of 2017.
Lenders are due to release
full-year results by end of March with share prices generally tending to
rise ahead of the reportage as investors jostle for positions with an
eye on dividends.
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