Green shoots in Kenyan mart?

The stock market weakened in Q3 2009 after  having recorded some good gains in 2009.The volume of shares traded the period declined to 825.9 million compared to 983.75 in Q3 2008. The value of shares traded also dropped from $191 million in Q3 2008 to $131 million  in Q3 2009.Despite the lower activity ,foreign  participation  in the local equity market increased and constituted between 60% and 78% of the turnover in July and August.However, it was a decline in September. Although it is difficult to clearly assess the reason for the drop, the possibility was as a result of foreigners interest directed to the fixed income market.

The banking sector first half results reflected, a tough economic environment.Total operating income for the listed banks increased by 12% over the period, compared to 51% in 1H 2008.The subdued performance in 1H 2009 was mainly driven by increasingly cautious approach to leading by commercial banks and higher provisioning levels taken due to economic slowdown.It should be noted that the good performance in 1H 2008 had been driven by transactions related to the Safaricom IPO and the immediate business pick after post election crisis.

Earnings from the non-financial sector  especially the cement companies showed positive growth despite the economic conditions boosted by a boom in urban housing market and rising infrastructural spending .Results in the ICT sector were less impressive, attributed to increased depreciation for capital on rolling out the fibre optic cable(read speculative mentality of recouping the investments the same day).

The stock market will remain subdued for the rest of the year. However, there are signs of "green shoots" in the economy and we strongly believe this will trigger equity investments given that valuations  are at historical five year lows.   


When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!