Boon for NSE investors as Q1 profits hot on dividend payday

*KCB Group CEO Paul Russo and Group chairman, FCS Dr Joseph Kinyua during the 54th KCB Group Annual General Meeting in Nairobi /HANDOUT*

It was a week of harvesting for investors at the Nairobi Securities Exchange, with various firms led by KCB Group splashing billions in dividend payouts.

The regional bank, which commands total assets of over Sh2 trillion, paid investors Sh9.6 billion in dividends on Thursday, with each share earning Sh3, reaffirming a sustained return to shareholders, as it seeks to consolidate its growth ambitions across East Africa.

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The shareholders approved a final dividend of Sh1.50 per share at the Annual General Meeting (AGM) in Nairobi, net of withholding tax to the shareholders on the members' register at the close of business on April 3, 2025.

Together with an interim dividend of Sh1.50 per share paid on October 23, 2024, brought the total dividend paid for the year to Sh3 per share.

This, coupled with a share price appreciation of 90 per cent recorded in the year, amounts to a shareholder return of 97.2 per cent in 2024, up from -42.5 per cent in 2023.

Although its share price dropped by a marginal 2.02 per cent on Friday as shareholders recouped value to close the week at Sh40.80, market analysts expect it to close the Sh42.80 it reported a week before the close of books for dividends on impressive Q1, 2025 results.

On Wednesday, KCB Group reported a profit after tax of Sh16.53 billion in the first three months of the year ending March 2025, compared to Sh16.48 billion reported in a similar period last year, with notable growth in key financial metrics.

Other firms that issued dividends include TP Serena, Liberty Kenya and BK Group, while almost six others, including Standard Chartered Bank, have issued AGM notices.

TPS Eastern Africa PLC, which operates Serena Hotels, commanded the gaining list at the NSE since Monday, with stockbrokers tipping it to continue with the trend this week after reinstating dividend payout after a five-year hiatus.

The firm playing in the hospitality sector declared a Sh0.35 per share dividend for FY2024, matching its last distribution in FY2018.

During the week, the group reported a net profit of Sh1.3 billion in FY2024, a 188 per cent increase from Sh457 million in 2023. Revenue rose by five per cent to Sh10.19 billion, up from Sh9.68 billion the previous year.

Generally, the Nairobi bourse reported increased activities during the week under review, with the NASI, NSE 25 and NSE 20 share price indices increasing by 0.36 per cent, 0.41 per cent, and 0.34 per cent, respectively. The market capitalization increased by 0.44 per cent, pushing investors’ paper wealth to Sh2.1 trillion.

Investors continued with the scramble for government securities during the week, despite declining returns. According to the weekly bulletin by the Central Bank of Kenya, the Treasury bill auction of May 22 received bids totaling Sh34.2 billion against an advertised amount of Sh24 billion, representing a performance of 142.5 per cent.

Interest rate on the 91-day and 182-day Treasury Bills declined, while that on the 364-day remained stable.

Bond turnover in the domestic secondary market increased by 22.59 per cent, hitting Sh51.9 billion compared to Sh42.3 billion reported the previous week.