Kenya Equities Market Weekly Update – Week Ending 30th May 2025

Market Performance: The Kenyan equities market ended the week on a mixed note. The NASI rose marginally by 0.2%, while the NSE 10, NSE 25, and NSE 20 declined by 1.4%, 1.2%, and 0.3% respectively. Year-to-date (YTD), NASI leads with a gain of 7.1%, followed by NSE 20 (+6.1%), NSE 25 (+2.2%), and NSE 10 (+1.6%).

This week’s marginal uptick in the NASI was underpinned by gains in large-cap counters such as:

• NCBA: +4.8%
• Safaricom: +3.5%
• KCB Bank: +3.2%

However, downward pressure came from declines in:

• BAT: -13.1%
• Equity Bank: -11.1%
• DTB-Kenya: -5.9%

Investor Activity:

• Turnover: Decreased by 3.9% to USD 14.5 million, down from USD 15.0 million the previous week
• YTD Turnover: USD 329.9 million
• Foreign Investor Activity: Net sellers for the second straight week, recording net outflows of USD 2.7 million (previous week: USD 0.02 million). Cumulatively, foreign investors have sold USD 32.8 million YTD (2024: USD 16.9 million).

Corporate Highlights:

Sanlam Kenya Rights Issue Fully Subscribed Sanlam successfully concluded its rights issue, initially offering 500 million new shares at Ksh 5.00 each. The offer was 81.5% subscribed before underwriting. Sanlam Allianz Africa, the underwriter, acquired the remaining 92.3 million shares, resulting in full (100%) subscription.

• Entitlement ratio: 125 shares for every 36 held
• Total accepted shares: 402.6 million
• Proceeds: Ksh 2.5 billion
• Impact: Debt-to-equity ratio will reduce by 56.5% from 19.4x to 7.9x, aligning Sanlam Kenya with industry peers and supporting its turnaround strategy.

Banking Sector Earnings Overview – Q1’25

1. Equity Group Holdings

• EPS: Down 3.9% to Ksh 3.9
• Total Income: Ksh 48.2 bn (-3.8%)
• Asset Quality: NPLs up to 15.0% (from 14.2%)
• Assets: Up 8% to Ksh 1.75 tn
• Lending: Net loans up 3.3% to Ksh 804.7 bn

2. Absa Bank Kenya

• EPS: Up 3.7% to Ksh 1.14
• Expenses: Down 12.5% to Ksh 7.0 bn
• Asset Quality: NPL ratio up to 13.1% (from 11.1%)
• Loan Book: Down 5.6% to Ksh 308.4 bn

3. I&M Group

• EPS: Up 17.9% to Ksh 2.4
• Income: Up 12.3% to Ksh 13.0 bn
• Asset Quality: Slight deterioration, NPLs at 10.9%
• Assets: Up 7% to Ksh 568.4 bn
• Lending: Net loans up 0.7%

4. DTB Bank

• EPS: Up 21.1% to Ksh 11.5
• Expenses: Down 2.9%
• Asset Quality: Improved, NPL ratio down to 13.2% (from 14.9%)
• Lending: Net loans up 5.7% to Ksh 284.3 bn

5. HF Group

• EPS: Down 89.3% to Ksh 0.1
• Income: Up 33%, but expenses up 19.1%
• Asset Quality: Deteriorated further, NPLs at 25.2%
• Lending: Net loans up 2.0%

Outlook: While NASI remains positive YTD, volatility across bank earnings and continued foreign net selling suggest caution. Capital restructuring, like Sanlam’s rights issue, presents a key theme. Investors will likely continue monitoring inflation trends, forex dynamics, and earnings guidance as H2’25 begins.

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