Weekly Equities Market Update: 14th March 2025

This week, the Kenyan equities market experienced a downward trajectory, with all major indices posting losses. The decline was driven by significant losses in large-cap stocks, particularly in the banking sector. Below, we break down the key highlights, including index performance, turnover trends, and corporate earnings updates.

1. Market Indices Performance

All major indices recorded losses during the week, reflecting a bearish trend in the equities market:

• NSE 20: Lost 4.3%, bringing its year-to-date (YTD) performance to 8.6%.
• NSE 10: Declined by 3.3%, with a YTD gain of 0.5%.
• NSE 25: Fell by 3.1%, taking its YTD performance to 2.1%.
• NASI (NSE All Share Index): Decreased by 3.1%, with a YTD gain of 3.4%.

The decline was driven by losses in large-cap stocks, particularly in the banking sector.

2. Top Losers and Corporate Earnings

Top Losers:

• Standard Chartered Bank: -12.4%
• Cooperative Bank: -10.9%
• KCB Group: -5.8%

These stocks contributed significantly to the overall market decline, reflecting investor caution in the banking sector.

Corporate Earnings Highlights:

• KCB Group: Released its FY 2024 results, recording a 64.9% increase in Profit After Tax (PAT) to Kshs 61.8 bn, up from Kshs 37.5 bn in FY 2023. The strong performance was driven by a 24.0% increase in total operating income to Kshs 204.9 bn, outpacing a 5.2% rise in operating expenses.
• Sanlam Kenya Holdings: Reported a remarkable turnaround, with a 933.5% increase in PAT to Kshs 1.1 bn, compared to a Kshs 0.1 bn loss in FY 2023. This was driven by a 396.9% increase in insurance investment revenue to Kshs 5.3 bn and a 13.3% decrease in net reinsurance expenses.

3. Equities Turnover and Foreign Investor Activity

• Turnover: Equities turnover decreased by 18.8% to USD 15.5 mn, down from USD 19.1 mn the previous week. Year-to-date (YTD) turnover now stands at USD 174.6 mn.
• Foreign Investors: Foreign investors remained net sellers for the third consecutive week, with a net selling position of USD 0.6 mn (down from USD 4.7 mn the previous week). The YTD foreign net selling position now stands at USD 23.3 mn, compared to USD 16.9 mn in 2024.

4. Key Drivers of Market Performance

• Banking Sector Weakness: Losses in banking stocks like Standard Chartered, Cooperative Bank, and KCB Group were a major driver of the market’s decline.
• Reduced Turnover: The decline in equities turnover indicates reduced trading activity, reflecting investor caution amid market volatility.
• Foreign Investor Caution: Continued net selling by foreign investors highlights ongoing concerns about global market conditions and local economic factors.

5. Year-to-Date (YTD) Performance Snapshot

Key Takeaways for Investors

1. Market Volatility: The equities market remains volatile, with significant losses in key sectors. Investors should monitor large-cap stocks, particularly in the banking sector, for potential risks and opportunities.
2. Corporate Earnings: Strong earnings from KCB Group and Sanlam Kenya Holdings highlight the importance of focusing on fundamentally strong companies, even in a bearish market.
3. Foreign Investor Activity: The continued net selling by foreign investors may signal caution, but it also presents opportunities for local investors to acquire shares at attractive prices.

Conclusion

The Kenyan equities market faced headwinds this week, with all major indices posting losses. While the banking sector weighed heavily on the market, strong corporate earnings from KCB Group and Sanlam Kenya Holdings provided a silver lining. Investors should remain cautious but vigilant, focusing on fundamentally strong companies and monitoring market trends closely.

Stay tuned for next week’s update, where we’ll provide further insights into market trends and investment opportunities.