Foreign Exchange Reserves
The usable foreign exchange reserves stood at USD 6,711 million (3.59 months of import cover). This falls short of CBK’s statutory requirement to endeavour to maintain at least 4.0 months of import cover as well as the EAC region’s convergence criteria of 4.5 months of import cover.
Currency
The Kenyan Shilling depreciated against the Dollar, the Sterling Pound and the Euro to exchange at KES 153.74, KES 195.00 and KES 167.77 respectively. The observed depreciation against the Dollar is attributed to a high demand from energy and commodity importers.
| Currency | YTD Change | W-o-W Change |
|---|---|---|
| Dollar | 24.56% | 0.26% |
| Sterling Pound | 31.11% | 1.16% |
| Euro | 27.43% | 1.51% |
Liquidity
Liquidity in the money markets tightened, with the average inter-bank rate increasing from 10.40% to 11.47%, as tax remittances more than offset government payments. Open market operations remained active.
| Liquidity | Week (previous) | Week (ending) |
|---|---|---|
| Interbank rate | 10.40% | 11.47% |
| Interbank volume (billion) | 10.23 | 22.97 |
| Commercial banks’ excess reserves (billion) | 25.00 | 17.90 |
Fixed Income
T-Bills
T-Bills were under-subscribed during the week, with the overall subscription rate decreasing to 72.26%, down from 156.90% performance recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 344.79% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 29.22% and 6.29% respectively. The acceptance rate increased by 4.50% to close the week at 98.51%.
T-Bonds
In the secondary bond market, there was a higher demand for the week’s bond offers. Bond turnover increased by 61.48% from KES 12.95 billion in the previous week to KES 20.91 billion. Total bond deals decreased by 23.15% from 596 in the previous week to 458.
In the primary bond market, CBK issued a new 3-year bond FXD1/2024/03 and re-opened FXD1/2023/05 through a tap sale, targeting to raise KES 35.0 billion. The coupon rate for the reopened bond is 16.84%, while that of the new issue will be market-determined. The sale runs from 14/12/2023 to 10/01/2024.
Eurobonds
In the international market, yields on Kenya’s Eurobonds decreased by an average 0.66% compared to the previous week, 0.86% month-to-date and 0.09% year-to-date. The yields on the 10-year Eurobonds for Angola declined while that of Zambia increased. Below is a summary analysis of performance for individual bonds.
| Bond | YTD Change | M-o-M Change | W-o-W Change |
|---|---|---|---|
| 2014 10-Year Issue | 0.94% | -0.53% | -0.51% |
| 2018 10-Year Issue | -0.28% | -1.11% | -0.79% |
| 2018 30-Year Issue | 0.05% | -0.28% | -0.11% |
| 2019 7-Year Issue | -0.72% | -1.60% | -1.30% |
| 2019 12-Year Issue | -0.48% | -0.89% | -0.70% |
| 2021 13-Year Issue | -0.03% | -0.76% | -0.54% |
Equities
NASI, NSE 20, NSE 25 and NSE 10 settled 2.07%, 1.41%, 1.93% and 2.02% lower compared to the previous week, bringing the year-to-date performance to -27.75%, -10.95%, -24.30% and -8.47% respectively. Market capitalization also lost 2.06% from the previous week to close at KES 1.44 trillion, recording a year-to-date decline of -27.55%. The performance was driven by losses recorded by large-cap stocks such as Equity, Standard Chartered, Safaricom and Stanbic of 5.80%, 3.73%, 3.09% and 3.00%. These were however mitigated by the gain recorded by other large-cap stocks such as NCBA of 4.47%.
The Banking sector had shares worth KES 96M transacted which accounted for 19.95% of the week’s traded value, the Manufacturing and Allied sector had shares worth KES 11M transacted which represented 2.39% and Safaricom, with shares worth KES 24M transacted represented 72.63% of the week’s traded value.
Top Gainers and Losers in the Equities Markets
| Top Gainers | YTD Change | W-o-W |
|---|---|---|
| Unga | -47.66% | 9.48% |
| Home Africa | -14.71% | 7.41% |
| TP Serena | 6.15% | 6.15% |
| NCBA | 1.93% | 4.47% |
| Car General | -48.98% | 4.17% |
| Losers | YTD Change | W-o-W |
|---|---|---|
| Sanlam | -35.91% | -15.89% |
| Eveready | 40.28% | -9.82% |
| Bamburi | 20.99% | -7.98% |
| Equity | -20.75% | -5.80% |
| Transcentury | -49.49% | -5.66% |
Alternative Investments
| Losers | Week (previous) | Week (ending) | % Change |
|---|---|---|---|
| Derivatives Turnover (million) | 0.83 | 0.24 | -71.00% |
| Derivatives Contracts | 10.00 | 6.00 | -40.00% |
| I-REIT Turnover (million) | 0.10 | 0.22 | 118.43% |
| I-REIT deals | 11.00 | 15.00 | 36.36% |
Global and Regional Markets
| Global Markets | YTD Change | W-o-W |
|---|---|---|
| S&P 500 | 23.41% | 2.49% |
| Dow Jones Industrial Average (DJI) | 12.60% | 2.93% |
| FTSE 100 (FTSE) | 0.29% | 0.29% |
| STOXX Europe 600 | 9.77% | 0.92% |
| Shanghai Composite (SSEC) | -5.58% | -0.91% |
| MSCI Emerging Markets Index | 3.98% | 2.65% |
| MSCI World Index | 20.19% | 2.59% |
| Continental Markets | YTD Change | W-o-W |
|---|---|---|
| FTSE ASEA Pan African Index | 3.88% | 0.26% |
| JSE All Share | 1.16% | 2.20% |
| NSE All Share (NGSE) | 40.30% | 1.18% |
| DSEI (Tanzania) | -8.07% | -0.24% |
| ALSIUG (Uganda) | -27.29% | -0.83% |
The US stock market closed out the week in the green zone, fueled by unwavering optimism for rate cuts in 2024. Despite a cautious note from the Fed Chair, investors remain confident that a dovish pivot is coming, potentially unlocking a new era of economic growth and boosting corporate earnings.
The European stock markets closed the week on an upward trajectory, as investors optimism that major central banks will start cutting interest rates next year, especially the Fed.
Asian stock markets ended the week in the red, weighed down by concerns over China’s sluggish economy and deepening disinflationary trend, as evidenced by recent data showing falling prices.
On the global commodities markets, Crude Oil WTI and ICE Brent Crude closed the week 0.24% and 0.94% higher at $71.43 and $76.55 respectively. Gold futures prices settled 1.87% higher at $2,035.70.
Week’s Highlights
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