Co-op, Equity banks stocks to watch as T-Bill yields drop

Banks dominated the Nairobi Securities Exchange in the week ended March 14, with shareholders anticipating higher returns as the sector released impressive financial results for the year ended December 31, 2024.

KCB GROUP, which reported Sh62 billion in net earnings, was the biggest mover at the Nairobi bourse with a volume of 8.15 million shares valued at Sh135.44 billion followed by Co-operative Bank at 6.32 million shares valued at Sh88.3 billion.

Safaricom, which moved 3.77 million shares, however, continues to command market capitalisation at NSE valued at Sh711.16 billion.

Although the embattled retailer Uchumi Supermarket was the biggest gainer having shed at almost equal rate last week, KCB and NCBA featured in the top five list for the first time in several months, having gained 5.1 and three per cent respectively.

Sanlam Plc which ended its four year lose-making streak on Thursday saw its share price gain by 4.1 per cent to earn its space in the top five gainers’ list.

The diversified financial service provider rode on higher investment income to record Sh1 billion in net earnings.

Stanbic Bank, which was the first to unveil 2024/25 results, has started shedding as investors’ excitement fades.

A similar fate caught up with Diamond Trust Bank, shedding three per cent.

This week, banking counters are expected to continue with the dominating trend as Co-op Bank Group and Equity Bank Holdings are expected to announce profits for the financial year.

Generally, trading activities that NSE was lower than the previous week, with all indices dropping.

NASI, NSE 25 and NSE 20 share price indices decreased by 2.7 per cent, 3.2 per cent and 3.8 per cent, respectively, during the week.

Market capitalisation, equity turnover and total shares traded decreased by 2.7 per cent, 27.2 per cent and 28.2 per cent, respectively.

This low trading saw Sh55 billion of investors’ paper wealth wiped out of the market.

The low yield rate for government securities continues to push investors away, with the market receiving the lowest bids since CBK lowered the base lending rate to 10.75 per cent.

Data from the CBK’s weekly bulletin shows yield rates both for 91, 18,2 and 364-day Treasury bills have dropped by an average of three.

They are now at 8.9, 9.1 and 10.4 per cent respectively from a high of 15.9. 16.7 and 18.5 per cent in July 2024.

While 91-day bills were oversubscribed by 300, the 182 and 364 ones received average bids worth Sh1.2 billion each against a demand of Sh10 billion each.