Foreign Exchange Reserves

The CBK’s usable foreign exchange reserves remained adequate at USD 8,372 million (4.98 months of import cover). This meets CBK’s statutory requirement to endeavor to maintain at least 4.0-months of import cover, and the EAC region’s convergence criteria of 4.5-months of import cover.

Currency

The Kenyan Shilling depreciated against the Dollar but gained against the Euro and the Sterling Pound. The observed overall depreciation against the Dollar is attributable to increased Dollar demand from energy and commodity importers.

 Week BeforeWeek After
Dollar115.90116.12
Euro122.53121.77
Sterling Pound144.92142.97

Liquidity

Liquidity in the money markets relatively eased, supported by government payments, which offset tax remittances. Open market operations remained active.

 Week BeforeWeek After
Interbank rate4.76%4.61%
Interbank volume (billion)19.6312.52
Commercial banks’ excess reserves (billion)25.3029.20

Fixed Income

T-Bills

T-Bills were over-subscribed during the week attributed to eased liquidity in the money markets. The acceptance rate decreased by 5.89% to close the week at 94.11%. The decline in acceptance rate reflect demand for higher rates by investors citing high inflation and loss of shilling value against the dollar.

T-BillYield (% Rate)Subscription Rate
Week BeforeWeek AfterWeek BeforeWeek After
Overall70.20%102.28%
91 day 7.58%7.68%131.32% 131.97%
182 day8.54%8.72%37.16%79.26%
364 day9.84%9.86%78.79%113.41%
T-Bonds

The bonds market had a higher demand for the week’s bond offers. Bonds turnover rose by 181.1% to 16.15B up from 5.75B in the previous week.

In the primary market, the Central Bank released results for the auction of the 10yr and 15yr bonds. The bonds received bids worth 43.1B against the targeted 60B translating to a 71.9% undersubscription rate as investors sough higher rates citing high exposure to inflation and currency risks. The 10yr and 15yr bonds attracted average rates of 14.0% and 13.5% respectively. CBK accepted Kshs 31.7B.

Eurobonds

In the international market, yields on Kenya’s Eurobonds rose by an average of 109.9 basis points. The yields on the 10-year Eurobonds for Angola and Ghana also increased.

Equities

NASI, NSE 20 and NSE 25 decreased by 3.51%, 0.48% and 2.46% respectively. The market capitalization also decreased by 3.52% to 2.176 trillion. The performance was driven by losses recorded by large-cap stocks. Top losses were recorded in Equity, ABSA, Cooperative Bank and Safaricom which decreased by 3.50%, 2.41%, 1.38% and 5.62% respectively.

The Banking sector had shares worth Kshs 698M transacted which accounted for 28.17% of the week’s traded value. Manufacturing & Allied sector had shares worth 136M transacted which represented 5.50% and Safaricom, with shares worth Kshs 1.6M transacted represented 64.83% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersW-o-W
Sanlam15.12%
EAAGADS13.91%
Eveready7.32%
Trans Century7.27%
Car General6.67%
Top LosersW-o-W
NBV-15.86%
Kapchorua Tea-8.86%
EA Cables-6.36%
Flame Tree-6.30%
Safaricom-5.62%

Alternative Investments

 Week BeforeWeek After% Change
Derivatives Turnover (million)1.611.758.66%
Derivatives Contracts168-50.00%
I-REIT Turnover0.0810.176117.98%
I-REIT Deals172652.94%

Global and Regional Markets

Global MarketsW-o-W
S&P 500-2.41%
Dow Jones Industrial Average (DJI)-2.14%
FTSE 100 (FTSE)0.41%
STOXX Europe 6000.78%
Shanghai Composite (SSEC)2.76%
MSCI Emerging Markets-6.05%
MSCI World Index-3.86%
Continental MarketsW-o-W
FTSE ASEA Pan African Index-6.48%
JSE All Share1.14%
NSE All Share (NGSE)4.25%
DSEI (Tanzania)0.83%
ALSIUG (Uganda)-2.03%

U.S stocks closed the week higher, as gains in the Technology, Oil & Gas and Consumer Services sectors led shares higher. However, the stocks were lower in most of the week. This follows as investors juggled fears of nagging inflation with signs it could be peaking.

European stocks closed the week high as investors continue to assess persistent inflation, aggressive monetary tightening, and the associated impact on global economic growth. Investors are continuing to monitor the geopolitical fallout from Russia’s invasion of Ukraine.

Asia Pacific stocks closed the week high as investors closely monitor impacts of the rising inflation which prompted tightening of monetary policies by central banks. China recorded an increase as Beijing recorded a smaller increase of COVID-19 cases, dwindling expectations of another lock-down in the city. Australia, Hong Kong’ and Japan also reported an increase.

On the global commodities markets, Crude Oil WTI closed the week lower by 0.41% and the ICE Brent Crude decreased by 0.88%. Gold futures prices decreased by 3.85% to settle at $1,1810.30.

Week’s Highlights

  • The Energy and Petroleum Regulatory Authority (EPRA) announced a Kshs. 5.50 increase on pump price of petroleum products to reach a new record high. Super petrol, Diesel and Kerosene will retail at Kshs 150.12, Kshs 131 and KSHs 118.94 respectively. The increase is attributed to surging crude oil prices as observed in the 10.43% increase registered by the Free on Board of Murban oil to $93.99 per barrel. This was further worsened by the depreciating shilling against the dollar which hit a record high of Kshs 116 per dollar last week.
  • Stanbic Bank Kenya released the April Purchasing Managers Index (PMI) with an observed drop to 49.5 from 50.5 recorded in March on the back of high inflation, reduced output and lower new orders from clients. However, employment increased to a lesser degree than the previous month.
  • Hass consult released the quarter one House Price Index report. Property prices registered a 2.8% increase attributable to high inflation. Property rents also registered mild increases with satellite towns registering the highest rent increase. Additionally, Hass also released the Land Price Index that saw an overall 0.11% increase in land prices in Nairobi. Satellite towns recorded mixed performance with Thika, Juja and Ruiru registering gains while Limuru dropped.
  • The government of Zimbabwe ordered banks to stop lending with immediate effect, seeking to curb its rapid devaluation on the black market. The Zimbabwean dollar, officially quoted at 165.94 against the U.S. dollar currently trades at between 330 and 400 in the black market.
  • The Capital Markets Authority (CMA) licensed three more fund managers to raise the total to 29. The three; African Alliance Kenya Asset Managers Limited, CPF Financial Services Limited and Kuza Asset Managers Limited have been licensed to manage Collective Investment Schemes (CIS).
  • Rwanda on Thursday retained its key lending rate at 5% in attempts to curb rising inflationary pressures due to soaring global commodity prices. The rate was raised from 4.5% in April 2020 due to the Covid-19 pandemic.
  • Kenya’s export of duty-free goods to the United States under the African Growth and Opportunity Act (Agoa) rose by 20% in 2021, crossing the KSh50 billion mark, the biggest leaps in seven years.

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