Business Daily (Nairobi)
George Ngigi
9 December 2011
The NSE-20 Share Index gained 30.75 points Thursday, picking up on Wednesday’s gains as investors came in to buy stocks at a bargain capitalising on recent erosion in share prices.
The indicative index closed at 3,109.75 points, with equity turnover at Sh241 million compared to the previous day’s Sh159 million.
Seventy per cent of the trading counters posted gains during the session, with Express Kenya being the largest gainer going up 9.7 per cent to recoup losses recorded earlier in the week.
“Most of the counters are low so investors feel that the prices are attractive,” said Deris Mogoi, an analyst with Standard Investment Bank. Majority of the stocks have lost a third of their value this year against a backdrop of soaring inflation, which hit 19.72 per cent in November– and a shilling that has been depreciated for most of the year.
The NSE has been on a three-week drop, with the last recorded daily gain being on November 17– a slide that saw it hit a two-year low.
The market turnover was buoyed by the trading on the East Africa Breweries (EABL) counter which moved 736,000 shares closing 1.85 per cent higher to Sh165.
“EABL accounted for 50.3 per cent of traded volume. A large trade on the brewer came through at the close of trading involving local institutional investors” said Standard Investment Bank in a market report.
The company recently secured a concessionary credit facility from its anchor shareholders–Diageo International—dispelling speculation of a rights issue.
The company also bought out Tanzania’s Serengeti breweries, while a new beer canning facility is expected to boost the brewer’s revenues.
Other active counters during the day included Safaricom which moved 3.2 million shares, Equity Bank and Co-operative Bank.Depite the gain, analyst expect the market to lose further as retail investors liquidate for household obligations and investors confidence decline due to the Eurozone crisis where a conclusive solution is yet to be given. “We are entering a festive season where there is a lot of spending and most retail investors will liquidate,” said Mr Munyoki.
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