Saturday, October 14, 2006

MARKET WRAP – 13/10/06

A generally losing week on the bourse evidenced by the large number of declines. 47% of the active counters adjusted back while 29% appreciated. Kenya Oil captured the largest slide, down Kshs. 13 to close the week at Kshs. 107. Kenya Power shed Kshs. 12 to close at Kshs 259 while ICDC and NMG both closed the week Kshs. 9.00 below the previous week’s close at Kshs. 335 and 230 respectively.

Appreciating counters all yoyoed between price ranges already captured with no new high being hit over the week. Bamburi Cement was up Kshs. 13 to clos eat Kshs. 190 after having shed to a low of Kshs. 177 in the previous week. TPS bounced back to Kshs. 94over the week while a usually quiet Olympia holdings was up Kshs. 7.75 to close the week at Kshs 23.75. EABL also edged higher to close the week at Kshs. 159.

On the news front, Kenya Re continued gearing itself for the much awaited IPO. Financial bids for the Lead Broker to be commissioned with the task of selling shares on behalf of the company are to be opened on Monday. A consortium led by Dyer and Blair Investment Bank had earlier clinched the transaction advisor deal. The bourse is bound to experience further price dips on the run-up to and during the offer period as investors prepare to take positions.

With the year 2008 expiry of the Comesa importation lifeline drawing closer, the government has set aside over Kshs. 1.1 bn. To restructure the sugar industry. The lifeline has shielded the local industry from competition by limiting sugar imports to 200,000 tonnes, and its expiry will expose the local industry to fatal competition considering the high production costs on local producers relative to other competing countries. With the governments Vision 2030: Transforming National Development strategy targeted at an annual growth rate of 10% for the next 25 years, the government can not afford to expose any of the sectors and need to put in every possible effort to ensure sustainable growth and strength in unavoidable competiton.

1 comment:

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