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Political blues cost NSE investors Sh20b on Monday

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The Nairobi Securities Exchange (NSE) lost Ksh 20 billion paper value on Monday as it struggled to shrug off the cloud of political uncertainty that has hung on the market for the most part of this year.

Market value, also known as market capitalisation, settled at Ksh 2.38 trillion in yesterday’s (Monday) trading compared to Ksh 2.41 trillion posted on Friday.

This represented a Ksh 20.6 billion or 0.86% decline, a marginal drop from its worst performance this year. The bourse opened the week with a total of 15 million shares valued at Ksh 542 million traded, up from 17.5 million shares valued at Ksh 361 million posted on Friday.

The NSE 20 Share Index was down 2.46 points to stand at 3797.96, while the All Share Index (NASI) ended 1.41 points lower to stand at 163.09. The NSE 25 Share Index, on the other hand, dropped 23.98 points to stand at 4278.63.

Monday was the last day for those interested in challenging the re-election of President Uhuru Kenyatta in the October 26 repeat election to file petitions at the Supreme Court.

The financial markets have taken a beating from the goings-on in the political arena in the country, having lost Ksh 130 billion in the two days after the August 8, Presidential poll was nullified by the Supreme Court.  It has since been on a see-saw ever since in reaction to the political stalemate. In yesterday’s trading, most activities were reported in the banking sector, which had shares worth Ksh 166 million transacted. This accounted for 30.75% of the day’s traded value.

The Kenya Commercial Bank (KCB) Group moved 1.7 million shares valued at Ksh 70.8 million at between Ksh 41 and Ksh 42.

Equity Group Holdings was down 25 cents to Ksh 40 as it moved 1.6 million shares valued at Ksh 65 million. The other most active counter at in the banking sector was Diamond Trust Bank that moved 113,000 shares worth Ksh 21 million. It closed the day at Ksh 185.

All eyes were on Safaricom, which had 5.6 million shares valued at Ksh 141 million transacted at between Ksh 24.75 and Ksh 25.75, in reaction to calls by the Opposition to boycott the company’s products last week for its perceived role in bungling the August 8 presidential vote. Yesterday, however, investors seemed not to have been bothered by the boycott going by the trading price.

Safaricom accounts for 42.3% of the NSE capitalisation and any changes in its shares has a direct impact on the overall health of the bourse. It is also one of the most liquid counters at the bourse, given the interest, it attracts from the foreign investors.

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Last week, the firm, which is Kenya’s largest technology firm, reported that it had grown its half-year profits by 9.5% to Ksh 26.2 billion in the first half of the year ended September 2017, continuing its standing as East Africa’s most profitable company.

During the period under review, the telco defied a difficult economic environment due to the cloud of uncertainty that came with the prolonged electioneering period in the period to grow its revenue 12 per cent to Ksh 109.7 billion.

The firm, which is now seeking investment opportunities to expand outside Kenya, says the growth would be 21 per cent if it excludes a one-off adjustment of Ksh 3.4 billion it had in a similar period last year. In the six months to September 2016, the firm made Ksh 23.9 billion.

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