Market Performance

The equities market closed the week on a broad downward trajectory, with all major indices posting negative returns. The NSE 10 registered the steepest decline at 4.2%, followed by the NSE 25 (-3.9%), NASI (-3.6%), and NSE 20 (-3.3%).

Despite the weekly pullback, all indices remain strongly positive on a year-to-date basis:

• NSE 20: +48.3% YTD
• NASI: +44.5% YTD
• NSE 25: +39.4% YTD
• NSE 10: +39.3% YTD

The week’s performance was weighed down by sell-offs in key large-cap counters:

• KCB Group (-8.6%)
• EABL (-5.3%)
• ABSA (-4.6%)

These declines overshadowed gains in smaller or mid-cap counters.

Banking Sector Performance

The Banking Sector Index fell by 4.1% to 191.9, down from 200.1 the previous week. Sentiment was mainly depressed by:

• KCB (-8.6%)
• ABSA (-4.6%)
• Cooperative Bank (-4.4%)

Overall, the banking sector continues to face pressure from elevated credit risks, tighter liquidity conditions earlier in the year, and persistent foreign investor exits.

Market Activity & Foreign Investor Flows

• Equity turnover declined by 17.2% to USD 24.4 million, from USD 29.4 million the previous week.
• YTD turnover now stands at USD 981.6 million.
• Foreign investors remained net sellers for the eighth consecutive week, recording:
  • Net outflows of USD 4.8 million, compared to USD 6.4 million the previous week.
  • YTD foreign net selling now totals USD 93.0 million.

Sustained foreign selling signals cautious sentiment amid global risk repricing and domestic valuation adjustments.

WEEKLY HIGHLIGHTS

1️⃣ Standard Chartered Bank Kenya — Q3’2025 Financial Results

Key Take-Outs

📉 Decline in Profitability

• Core EPS dropped 38.2% to Kshs 25.9, from Kshs 41.9 in Q3’2024.
• Driven by:
  • 17.0% decline in total operating income
  • 15.8% increase in operating expenses

This reflects margin pressure, muted loan growth, and elevated cost intensity.

📊 Improved Asset Quality

• Gross NPL ratio improved to 5.9% (from 7.5%).
• NPLs declined 24.8%, significantly outpacing a 4.6% decline in gross loans.

💳 Decreased Lending

• Loan book contracted to Kshs 154.2 bn, reflecting risk aversion and tighter underwriting.

💰 Dividends

• No interim dividend declared, consistent with last year.

2️⃣ HF Group — Q3’2025 Financial Results

Key Take-Outs

📈 Strong Profit Recovery

• PAT grew 104.5% to Kshs 1.0 bn.
• Supported by:
  • Net interest income ↑ 63.3%
  • Non-interest income ↑ 28.6%

⚠️ EPS Decline Due to Dilution

• Core EPS fell 58.3% to Kshs 0.7, following the Kshs 6.0 bn rights issue.

📊 Improved Asset Quality

• Gross NPL ratio improved to 23.3%, from 24.4%.

📘 Balance Sheet Expansion

• Total assets ↑ 21.9%
• Government securities ↑ 94.3%
• Net loans ↑ 2.8%

The shift towards government securities indicates a cautious approach to credit risk.

3️⃣ Centum Investment – HY’2026 Results

Key Take-Outs

📉 Narrower Losses

• Loss After Tax reduced by 5.9% to Kshs 0.33 bn, from Kshs 0.35 bn.

🏗️ Improved Real Estate & Trading Performance

• Real estate losses ↓ 46.6%.
• Trading business losses ↓ 3.0%.

💼 Portfolio Performance

• Trading net income ↓ 11.4%
• Finance & investment operations improved by 33%, turning to a small profit (Kshs 0.05 bn).

📊 Stronger Balance Sheet

• Total assets ↑ 2.7% to Kshs 84.6 bn.
• Investment portfolio ↑ 4.5%
• Cash levels ↑ 63.2%

📉 EPS

• Loss per share improved slightly to Kshs -0.18, from Kshs -0.22.

🔭 Strategic Outlook

Centum plans to focus on:

• Cash generation
• Prioritizing profitable investments
• Strategic exits from mature assets
• Operational efficiency
• Accelerating monetization of real estate projects

The Group aims to restore sustained profitability and enhance shareholder value.

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