Markets continued to react positively to the calmness in the political divide after a relatively peaceful polling exercise with most of the top counters gaining.

At yesterday’s close, Nairobi Securities Exchange (NSE) market capitalisation was Sh2.32 trillion, compared to Wednesday’s Sh2.261 trillion on the back of a cautious note by analysts.

Early this week, NSE chief executive Geoffrey Odundo said the bourse was performing strongly due to optimism over the economy after the election period, an observation Muathi Kilonzo, the head of Equities at EFGHermes agreed with noting that there was a general “relief in the process of elections” by investors.

“I am pretty optimistic they (foreign investors) will return in a stronger way because our markets are undervalued.What will help the market now is local pension funds, stocks are reaching all time lows and are much undervalued,” said Odundo.

Traded volumes

Since Friday last week, the market has seen a consistent drop in turnover with an increase in traded volumes, driven by penny stocks including Kenya Power, which yesterday moved 168,000 shares at Sh1.50 and the KenGen stock that traded at Sh3.80 per share on a volume of 1,213,400 shares.

Wesley Manambo, an equity analyst at Genghis Capital reckoned Blue chips stocks like Safaricom, East Africa Breweries Ltd (EABL), and Equity Group remain key to the turnover print, partly because of foreign play to the unfolding general elections. “Blue chips, including Safaricom, Equity, EABL and a bit of KCB will determine the mood of the market until after the elections are done,” said Manambo.

Yesterday, turnover retreated to Sh228 million from Wednesday’s Sh329 million, with the number of shares traded standing at 9.7 million against 10.5 million posted on Wednesday, with Manambo reckoning the day-to-day turnover would hold at last week’s levels barring the Tuesday break that allowed traders to elect their leaders.

Yesterday, the Safaricom stock gained a whopping 4.43 per cent to Sh31.80 up from Sh30.45 registered the previous session with shares worth Sh76.8 million transacted.  This represented 33.63 per cent of the day’s traded volume. EABL on the other hand moved 25,000 shares worth Sh4 million at a fairly stable price of Sh158.

Market value

Equity Group holdings actively moved 1.3 million shares valued at Sh68 million at between Sh50 and Sh53, though it was a 2.82 per cent drop while KCB Group moved 732,000 shares valued at Sh31 million and closed at Sh42.8.

A total of 9,772,300 shares in 955 deals, corresponding to a market value of Sh 228.4 million were traded, compared with the previous day’s data showing an 8 per cent decline in volume, 31 per cent decline in turnover, but an 11 per cent improvement in deals. 

According to Manambo, downside risk remains elevated against the backdrop of cautiousness by foreigners with regard to the general elections.