Optimism despite drop in weekly performance at bourse

The NSE 20 Share Index edged up 0.73 per cent last week to stand at 4,510.47 points, suggesting that a level of optimism still exists in the market ready to catch falling prices.

Turnover declined to Sh3.2 billion from Sh3.5 billion posted the previous week. During the week, Consumer Price Index figures were released showing that the cost of goods and services edged up for the second month in a row in February to stand at 4.45 per cent from 3.67 per cent recorded in January, thanks to cyclical rent increases and back-to-school demand.

Equity Bank pulled up 6.6 per cent to close at Sh28.25, marking a decent rebound from its February 25 lows. With the price now past the immediate ceiling at Sh28, it appears a follow through and seems is likely to push the banking stock to its 2011 highs set at Sh30.

The advance partly received a boost from its 16.5 per cent increase in net profit for the year ending December 2012 to stand at Sh12 billion against Sh10.3 billion posted the previous year. Its net interest income stood at Sh23.9 billion compared to Sh16.2 billion earned in 2011.

KCB Group touched an all-time high at Sh39.25 by Tuesday before succumbing to profit taking, ending at Sh36 by the close of the week.

The market gave a muted response to the bank’s 11 per cent increase in after-tax profits for the full year 2012, showing the performance may have fallen below expectations. Net profit rose to Sh12.2 billion from the Sh10.98 billion recorded the previous year on the back of rising interest income that stood at Sh43 billion from Sh28.5 billion.

The bank’s loan book stood at Sh211.7 billion with customer deposits at Sh288 billion. Technically, its price is trading in the overbought zone and hence prime for correction in the near term.

Mumias Sugar Company gave up 8.42 per cent after suffering Sh1.1 billion half-year loss, at the same time issuing a profit warning for full-year results.

Its price is down 19 per cent year-to-date through building up on a 66.6 per cent loss suffered last year as investors grow jittery over the coming stiff competition as the March 2014 lapse of Comesa sugar import quotas nears.

The new agreement replaces a 2007 deal which will allow some 300,000 tonnes of duty-free sugar into the domestic market by March 1, 2011 with any consignments outside the quota attracting 40 per cent duty.

Cooperative Bank released its 2012 full-year results showing a 57 per cent rise in profit before tax from Sh6.36 billion to Sh9.97 billion. The impressive performance rode on the back of rising interest income, which rose to Sh15.9 billion from Sh11.8 billion.

This comes after increasing its loan book by 60.6 per cent to stand at Sh21.2 billion in the reporting period. Its earnings per share is now at Sh1.84 from Sh1.54 registered in the year 2011. The bank plans to open 25 branches in Kenya this year.