NSE resilient despite fall of stockbroker

Expected earnings by listed firms continued to cushion the Nairobi Stock Exchange, making it resilient to last Friday’s placement of Ngenye Kariuki Stockbrokers under receivership.

The NSE 20-share index only dropped 0.13 per cent compared to last week’s closing while the more inclusive NASI shed 0.61 points to close the day at 79.37 points.

The Capital Markets Authority placed the broker under receivership on Friday for failing to comply with market regulations.

The market had been expected to react negatively to the news, with a possible dampening of investor appetite.

“Equities are being boosted by the imminent earnings season. The earnings season should create additional volatility, but we predict that they will continue to rise,” said analysts at CfC Stanbic Financial Services.

A number of listed firms are expected to release their full 2009 financial results this month.

Traded

A total of 12 million shares valued at Sh155 million down from Sh283 million were traded on a volume of 28 million shares at the close of last week.

In the commercial and services sector, a total of 7.7 million shares, which accounted for 64.04 per cent of the days traded volume were moved.

Safaricom Ltd traded at Sh5.50, moving 7.2 million shares while CMC Holdings moved 265,000 shares at between Sh11.20 and Sh11.50 during the day’s trade.

The financials accounted for 2.8 million shares, representing about 24.04 per cent of the day’s volume.

Equity Bank declined to Sh16.10 on a volume of 350,000 shares, down from Sh16.50 posted the previous session.

NIC Bank moved 742,000 shares and closed at Sh36.00.

Industrial and Allied Sector moved 1.3 million shares which accounted for 11.59 per cent of the day’s traded volume.

Mumias Sugar still riding on the 561 per cent half-year profit moved 1.1 million shares at between Sh10.50 and Sh10.70.

Declining

According to the analysts, the ICT results should reflect declining gross margins, increasing operating expenses and interest expense on recently acquired debt, but top-line growth could provide some respite.

“Manufacturing and industrial companies may benefit from a stronger shilling in the second half of 2009, but higher input costs and the availability of cheap substitutes and imports may negate those gains,” the report added