Kenyan market watch

Kenya's financial markets experienced a surge in trading activity following the latest data released by the Nairobi Securities Exchange. By closing bell yesterday, a total of more than 10 million shares in 1,092 deals were traded, marking a 58% decline in volumes compared to the previous Friday. However, there was a notable 62% improvement in turnover and a 5% increase in deals. The key theme driving this market activity is the performance of Safari Com stocks, which have been dominating the market in recent weeks. Kevin Ngige, Senior Equities Analyst at Genghis Capital, shed light on the factors contributing to this surge. Ngige attributed the recent positive trends in the market to impending earnings reports from key players like KCB Bank and Co-op Bank. The anticipation of these reports has injected some momentum into the market, leading to increased volumes and turnover. Safari Com, in particular, has been a standout performer, with its share price reaching all-time highs. Ngige explained that Safari Com's significance in the Kenyan market cannot be overstated, as it accounts for a substantial portion of the country's overall market capitalization. Additionally, Safari Com's expansion efforts in Ethiopia have garnered investor interest, further driving up its stock price. The prospect of sustained growth in Safari Com's key markets has investors optimistic about the stock's future performance. Ngige highlighted the potential for Safari Com's share price to continue its upward trajectory if current market conditions persist. Aside from Safari Com, other notable gainers in the market include companies like Liberty Holdings, though their trading volumes may not be as significant. Ngige emphasized the importance of considering trading volumes alongside stock performance to gauge market trends accurately. Looking ahead, Ngige discussed the performance of key players like KCB Group and EABL. KCB has demonstrated solid performance, especially following equity's consolidation efforts. Ngige expects strong earnings from KCB in the upcoming period, driven by the bank's strategic initiatives. EABL, on the other hand, has seen improved performance as economic activities resume following pandemic-induced restrictions. Ngige suggested that EABL's prospects look promising as consumer demand rebounds. In contrast, the secondary bond markets have seen a decline, influenced by primary market activities and auction results. Ngige explained that new bond issuances can impact secondary market trading, leading to fluctuations in bond yields. When it comes to the corporate bond market, Ngige expressed reservations about its potential to drive market activity in the near future. He noted that the market may not witness significant developments beyond a few notable bond issuances. Additionally, Ngige addressed the potential market impact of Kenya's upcoming election in 2022. Drawing from past election cycles, Ngige anticipated a cautious approach from investors, particularly foreign participants. He predicted that market sentiment could be influenced by election uncertainty, leading to a wait-and-see stance among investors. Despite temporary market excitement surrounding earnings reports and vaccine rollouts, Ngige suggested that the market may remain subdued in the lead-up to the election. Overall, Ngige's analysis points to Safari Com's continued dominance as a key driver of market performance, with other factors like corporate earnings and election dynamics influencing market sentiment.