Kenyan equities market review

The Kenyan equities market has experienced a week of volatility, with daily turnover ranging from KES60.90 million to KES178.99 million. Safaricom, a key player in shaping market trends, stood out as the most traded counter. To provide an in-depth analysis of the equities performance, Erick Mokaya, Equity Analyst and Founder of Mwango Capital, shared his insights on the market from Stockholm. Mokaya highlighted various factors contributing to the fluctuations in turnover, including the aftermath of the finance bill rejection, transition in cabinet leadership, and policy uncertainties. One significant trend observed was the shift in market dominance between foreign and local investors. Mokaya explained that during volatile periods, foreign investors tend to pull back while local investors take a more prominent role. The availability of dollars and the recent stability in the forex market have also influenced investor behavior. Moreover, earnings season for banks in Kenya has led investors to carefully analyze and process financial results, impacting market activity. Looking ahead, Mokaya highlighted key events that could affect future trading volumes, such as the IMF's decision on financial support for Kenya and the upcoming review of Kenya's credit ratings by S&P. Additionally, Safaricom's performance was a focal point of discussion, especially in light of its operations in Ethiopia and the recent currency devaluation in the country. Mokaya expressed the need to monitor Safaricom's breakeven period in Ethiopia and its half-year earnings report for a better understanding of its valuation. Beyond Safaricom, Mokaya identified promising investment opportunities in the Kenyan market, particularly in blue-chip companies like Cooperative Bank, Stanchart, and Stanbic Holdings. Cooperative Bank's inclusion in the MSCI index and its strong presence in the cooperative sector stood out as appealing factors for investors. Mokaya also advised keeping an eye on upcoming bank earnings reports, with ABSA and NCBA set to report in the following week. From a regional perspective, Mokaya discussed the performance of equities markets across East Africa, emphasizing the developments in the Ugandan markets with the introduction of futures trading. As the Kenyan market often guides the performance of the region, Mokaya suggested that monitoring developments in Kenya could provide insights into the broader regional trends. The volatility and various market factors highlighted by Mokaya underscore the importance of careful analysis and strategic decision-making for investors navigating the Kenyan equities market. As the market continues to digest recent events and anticipate upcoming reports and reviews, stakeholders are advised to stay informed and agile in their investment strategies.