Christian Debt Recovery

Global Debt Jubilee

October 5th, 2009 |

Author: Gavin

global debt jubilee

Nairobi Stock Exchange (NSE) sector and benchmark index performance (2009)

Overall performance

Industrials finished relatively flat for the year returning a mere 1 per cent. Gainers for the year were Agriculture, Telecommunications and Transport rising 15 per cent, 24 per cent and 24 per cent respectively thereby outperforming both the NSE-20 index and NSE All-share index which both fell by 7 per cent. Losers for the year included Energy, Automobiles, Consumer Services and Utilities which fell 16 per cent, 28 per cent, 14 per cent and 14 per cent respectively.

Financials was the biggest loser slumping 70 per cent in the first three months of 2009 alone before levelling off to finish 67 per cent down for the year. The heavy weighting of Banks within the Financials sector meant that performance of the sector was very much in tandem with the banking stocks which dragged the wider sector significantly lower. Although the Insurance sub-sector fell by a mere 11 per cent for the year, the Banks sub-sector lost 69 per cent of its value during the same period contributing to the dismal performance of the sector.

Both the NSE-20 share index and the All-share index fell by 7 per cent for the year and just as in 2008, cyclical sectors continued to perform just as well as, if not better than( with the notable exception of Financials), the more defensive sectors despite the negative economic climate.

Following the period of malaise that dogged the markets in the second half of 2008 and early 2009 the market seemed to have found its bottom in February/ March, apart from Financials which continued to perform dismally throughout the year. Real GDP (adjusted for inflation) during the year grew by 2.6 per cent as opposed to the previous year figure of 1.7 per cent. Falling remittances from the Kenya Diaspora and a fall in demand for Kenyan exports had contributed to the lower 2008 figure as well as the political uncertainty that had gripped the country in much of 2008.

As the economy gradually recovered and as the opportunities to be had in attractive stock valuations became apparent, so did the appetite for risk driving trading volumes gradually upwards. However, some of the sectors seemed to have run into a headwind towards the end of the year with Agriculture and Telecommunications dropping marginally by 5 per cent and 8 per cent respectively in December.

Agriculture

Agriculture was the second-best performing sector for the year finishing 15 per cent up. Sasini Tea & Coffee Ltd. was up 3 per cent while Williamson Tea Kenya Ltd. gained a massive 159 per cent. Williamson Tea Kenya Ltd. was the best-performing stock overall for the year as it also became the second largest Agriculture-based company by market capitalisation second only to Sasini Tea & Coffee Ltd. Rea Vipingo fell 18 per cent while Kakuzi rose 38 per cent during the year.

The strong performance of the Agriculture sector was boosted by high tea prices which hit record highs in September on fears of drought in Kenya- the world’s biggest exporter of black tea, a tightening world supply of the produce and a weakening Kenya shilling against the dollar. The demand for tea was driven mostly by rapidly growing Middle East countries. The future of tea production continues to look bright as the Kenya Government promises to invest heavily in the industry. The strong performance of the crop was reflected in the income statements and share price performance of Williamson Tea Kenya Ltd., Sasini Tea & Coffee Ltd., Kapchorua Tea Ltd. and Limuru Tea Ltd.

Despite a 50 per cent rise in its revenues in 2009, Kenyan tea and coffee producer, Sasini Tea & Coffee Ltd.- the largest Agriculture company by market capitalisation- saw a 40 per cent fall in 2009 full-year net profit dropping to KES 526 million from KES 876 million in 2008. This was down to a rise in its operational costs. However, the stock held relatively well falling a mere 3 per cent for the year.

Williamson Tea Kenya Ltd. impressive share price performance over the year reflected its strong underlying company performance returning a KES 313 million pre-tax profit in 2009 compared to KES 44 million last year- a jump of over 600 per cent.

Pre-tax profits for Kakuzi Ltd. grew 43 per cent in 2009 to stand at KES 559 million on the back of better trading conditions for its tea, avocado and livestock operations. This helped boost its 38 per cent rise in share price in 2009. Despite a slight rise in dividend per share in 2009, both the fall in its pre-tax profits by 6 per cent from a year earlier to KES 214 million and the fall in EPS from KES 2.80 per share to KES 2.48 per share saw the Sisal producer Rea Vipingo post an 18 per cent drop in its share price.

Industrials

Within the Industrials sector, ‘other Industrials’ was the best performing sub-sector posting a 13 per cent gain for the year while Food Processors and Building & Construction each posted minor declines at 2 per cent. Beverages (of which East African Breweries Ltd. is the only listed stock) remained exactly flat for the year. However, all sub-sectors within the Industrials space outperformed both the benchmark indices for the year.

BAT Kenya Ltd. was the best performing stock among ‘other Industrials’ returning 31 per cent for the year while Crown Berger Ltd. rose 7 per cent during the same period. The heavier weighting of BAT Kenya Ltd. within the ‘other Industrials’ space meant that the weak performance of the other stocks within this space had little impact on the performance of the sub-sector as a whole. E.A Cables and Sameer Africa Ltd. were down 18 per cent and 15 per cent for the year.

BAT Kenya Ltd. stock performance was buoyed by underlying company results for the six months ended June 30, 2009 with the stock rising steadily during these six months up 31 per cent in the first seven months of 2009 before leveling off for the rest of the year. The company reported KES 858 million in profits after tax in the six months, an 8.6 % rise over the same period the previous year.

Despite declining profitability in the first half of the year resulting from high costs of fuel and imported raw materials (as the Kenya shilling weakened against the dollar), Crown Berger’s share price posted a 7 per cent gain for the year having fallen an incredible 42 per cent in the first 3 months alone.

E.A Cables Ltd. 18 per cent decline for the year followed disruptions to the company’s business in the beginning of the year brought about by the aftermath of post election violence and the constant depreciation of the regional currencies against the dollar with the Tanzania subsidiary in particular suffering a big hit. Pre-tax profits were down for the year from KES 670 million in 2008 to KES 526 million.

The Beverages sub-sector sole constituent- EABL posted a 30 per cent decline in its share price in the first two months of 2009 on the back of declining profitability in 2008 caused by high costs of raw materials, electricity, transportation, taxes and a continuing competition dispute with Tanzania Breweries Ltd. (a subsidiary of Sabmiller Ltd.). However the stock was able to rally 50 per cent by the end of June (taking full advantage of its dominance of the Kenya beer market as the economy picked up) before trading sideways for the rest of the year.

Despite an early fall in the first four months of 2009, Building & Construction rose steadily for the rest of the year rising over 30 per cent between April and December. While Bamburi Cement Ltd. – the sub-sector heavyweight- fell 5 per cent for the year, Athi River Mining Ltd. stock rose an impressive 23 per cent during the same period. The overall result for the sub-sector, however, was a decline of 2 per cent to finish in negative territory for the year.

Bamburi Cement Ltd. near flat performance in 2009 was despite strong underlying company performance which saw operating profits grow 30 per cent as a result of an improved distribution system and better cost management. Growth in pre-tax profits was boosted by one-off divestment gains from the sale of its Athi River Mining Ltd. shares and a final settlement of KES 218 million from insurers in respect of the 2007 Mombasa Plant fire incident. Financing costs also fell following full settlement of the company’s short-term borrowings from its substantial cash reserves generated during the year.

Athi River Mining Ltd. strong performance for the year was followed by plans to raise production capacity by building a KES 2 billion clinker and cement plant at Athi River, a move that would make the company more competitive by cutting raw material transportation costs by almost a half. The company hopes this will help it raise its market share, currently at 13 per cent, to 20 per cent. At present Athi River Mining Ltd. lags Bamburi Cement Ltd. and East Africa Portland Cement Ltd. in national coverage both of whom have estimated market shares of 58 per cent and 30 per cent respectively.

Food Processors were down 2 per cent for the year with Mumias Sugar Ltd. trading sideways during the period. An announcement by Mumias Sugar Ltd. to construct a KES 3.4 billion ethanol plant in Mumias and to spend more than KES 22.4 billion on sugar mill acquisitions in Kenya, Uganda and Tanzania between 2009 and 2014 seemed to have done little to drive demand for the stock.

Unga Group Ltd. was however down 34 per cent for the same period as pre-tax profits halved from KES 564 million in 2008 to KES 260 million in 2009.

Financials

The performance of the Banks sub-sector mirrored exactly that of the wider Financials sector (falling 69 per cent for the year while Financials fell 67 per cent over the same period) emphasising the dominant weighting of Banks within the broader Financials sector. Banks and Financials were the worst performing sub-sector and sector for the year respectively massively underperforming both the benchmark indices (both of which fell by 7 per cent for the period) and contributing to drag the overall market downwards. In the first four months of the year alone Banks (sub-sector) and Financials (sector) fell 72 per cent and 70 per cent respectively

Equity Bank Ltd. shares were particularly hit losing almost their entire value during the year. The shares lost 92 per cent of their value during 2009 as the global financial crisis took a heavy toll on banks worldwide. Most banks, both local and subsidiaries of international banks, however faired relatively well during the year.

Barclays Banks of Kenya Ltd., Kenya Commercial Bank Ltd. and Co-operative Bank of Kenya Ltd. showed much more measured declines at 11 per cent, 13 per cent and 16 per cent respectively while Standard Chartered Bank shares remained exactly flat for the year. The fact that the Banks sub-sector saw such a massive decline in 2009 whereas most of the major banks posted only minor share price losses showed the previous dominance of Equity Bank Ltd., not only within both the Banks sub-sector and Financials sector respectively but also, within the wider NSE-20 and NSE- All-share indices.[1]

Despite a 33 per cent growth in customer numbers (from 3.3 million in 2008 to 4.4 million in 2009) and an almost 40 per cent growth in customer deposits (from KES 50 billion in 2008 to KES 70 billion in 2009) Equity Bank pre-tax profits grew only 5 per cent during the period. The over-valued Equity Bank Ltd. stock (which hit an all-time high in July 2008) saw a sell-off in 2009 with the stock falling below fair value and losing almost its entire value within a year.

Barclays Bank of Kenya Ltd. faired much better posting better-than-expected 2009 pre-tax profits on better cost management and a drop in provisions for bad loans. Ranked the second biggest bank in Kenya by assets, Barclays Bank of Kenya Ltd. pre-tax profits climbed to KES 9.billion from KES 8 billion in 2008. The company also raised its dividend per share to KES 2.50 from KES 2.00 in 2008 as the company changed its marketing strategy to include the lower-income end of the market.

Standard Chartered Bank Ltd. was the best performing stock within the Banks spectrum remaining flat for the year to close where it had left off at the end of 2008. At 41 per cent the bank recorded the biggest growth in pre-tax profits for the third quarter of the year to stand at KES 5.2 billion. Its provisioning for bad loans was up a meagre 2.71 per cent from KES 290 million in the third quarter the previous year to KES 298 million during the same period in 2009. This minimal change in the bank’s provisioning showed better loan management in comparison to its peers and also in light of the difficult economic conditions that has seen most banks increasing their loan loss provisions significantly.

Kenya Commercial Bank Ltd. share performance in 2009 was more or less in line with the performance of most of the other major banks on the back of a 5 per cent rise in its 2009 pre-tax profits as well as a 23 per cent jump in its net income The stock’s relatively moderate performance was buoyed by the maintenance of its dividend at KES 1 per share amid plans to raise 15 billion shillings in debt and equity to fund further expansion in the region.

The Insurance sub-sector fared much better than Banks falling 11 per cent during the year. This was the best-performing sub-sector within Financials although it underperformed both the NSE-20 and NSE All-share indices for the year. Kenya Reinsurance Corporation Ltd. was down 8 per cent while Jubilee Insurance Ltd. was down 7 per cent for the year. Pan Africa Insurance Ltd. was the worst performing stock within the Insurance sub-sector falling 27 per cent during 2009.

Pan Africa Insurance Ltd. dismal share price performance in 2009 was despite strong underlying performance numbers with profits after tax of KES 139 million for 2009 against a loss of KES 96 million in 2008. A dividend of KES 1.70 per share was also paid out in contrast to 2008 when no dividend was paid out. However, the future may prove challenging as the uptake of Individual Life Insurance stagnates on the back of slowed economic growth which has affected private disposable incomes.

‘Other Financials’ fell 30 per cent in 2009 outperforming Banks and the wider Financials sector but underperforming the Insurance sub-sector. Centum Investment Ltd. shares were particularly hit losing 40 per cent of their value in 2009 following poor performance of the rail firm RVR in which Centum holds a 6 per cent share. RVR posted a loss of KES 1.3 billion in the year to June 2009. Between April and July, however, the stock saw a 62 per cent rally on the back of a 22.6 per cent acquisition stake in Carbacid Investments Ltd before finishing dismally for the year. In contrast Housing Finance Company of Kenya Ltd. lost marginally in 2009 down 7 per cent as the stock continued to benefit from the buoyant housing market in the country.

Energy (Oil & Gas)

The Energy sector was down 16 per cent for the year underperforming the two benchmark indices- the NSE-20 index and the NSE All-share index. Kenya Oil Ltd. – the largest company in the sector by market capitalisation was down 24 per cent for the year despite a 34 per cent rise in pre-tax profits. This was due to a 71 per cent drop in financing costs compared to 2008. The company continued to entrench its business in the region, mainly through strengthening its existing subsidiaries, and expanding through acquisitions in Burundi and Zimbabwe and increasing its total presence to seven countries outside Kenya. However, the stock lost 33 per cent of its value in the first two months of 2009 alone on anticipation of a dilution of its share with the acquisition of Kobil Ltd. in March.

Unlike its peer Kenya Oil Ltd., Total Kenya Ltd. dropped a mere 7 per cent in 2009 on the back of the successful acquisition of Total Marketing Kenya (formerly Chevron Kenya Ltd.) in October. However, pre-tax profits were lower on the previous year falling 29 per cent to KES 734 million primarily due to a sharp fall in crude prices in 2009. The company’s holdings of expensive inventory in the year were made at a time when prices were falling. As well as this, the acquisition led to a 15 per cent rise in fixed costs on its income statement. Despite this the company was one of the better performing stocks within the Energy sector.

Telecommunications

Telecommunications (with Safaricom Ltd. as the single listed stock) was up 24 per cent making it the one of the best performing sector for the year. The stock fell 29 per cent in the first two months of the year as the overall market fell to bottom out in March before the stock rallied 78 per cent between February and December.

Safaricom Ltd pre-tax profits were up 1.8 per cent on its 2008 figure (rising to KES 9.13 billion from KES 8.98 billion) as well as the EPS which rose 8.4 per cent. This was against the backdrop of an impressive 160 per cent growth in its mobile broadband services business as well as an almost 250 per cent growth in its mobile telephone money transfer service (M-PESA) revenue reaching a coverage of about 20 per cent of the country’s population.

Safaricom Ltd. continued to dominate the mobile telecommunications industry holding a 77 per cent share of the market but gradually ground to the minor players- Zain Kenya Ltd., Telkom Orange Ltd. and Yu Ltd. who held 14 per cent, 6 percent and 3 per cent market share respectively by year end. The Company has however continued to invest heavily in improving its infrastructure so as to retain and improve its market share. Going forward competition will continue to constitute its foremost challenge in addition to a dynamic and challenging regulatory and economic environment, high energy costs and an uncertain political climate.

Automobiles

Automobiles was the third worst performing sector for the year losing 28 per cent of its value in 2009. The sector heavyweight- CMC Holdings Ltd. lost 29 per cent of its value while Car & General Ltd. fell 20 per cent.

Despite a steady rise in its market share in the overall vehicles industry to stand at 20 per cent at the end of 2009, the company’s pre-tax profits for the year dropped 38 per cent from KES 1.3 billion in 2008 to KES 807 million this year although revenue from vehicles sales was up 2 per cent from KES 11.5 billion in 2008 to KES 11.7 billion in 2009. The falling profitability was due to increasing financing costs (as the cost of credit went up following the global financial crisis) as well as the depreciating Kenya shilling in particular against the Japanese Yen.

However, in the long-term, the stock stands to benefit from the Kenya Government’s decision to buy Volkswagen Passat vehicles to replace less-fuel efficient luxury cars now in the state fleet. In addition, although CMC Motors Ltd. continues to wrestle with Toyota Ltd. for the dominance of the passenger car market, the battle has already been won at the heavier end of the transportation market with its range of heavy commercial vehicles like UD and MAN trucks selling well and CMC Motors Ltd. continuing to hold 60 per cent of the market for large 65-seater buses and 75 per cent share of the market for agricultural tractors.

Car & General Ltd. pre-tax profits for 2009 were down 13% from the year before to KES 279 million while EPS fell 7 per cent from KES 9.50 in 2008 to KES 8.80 this year. Despite the dividend per share holding at KES 0.67 the stock lost 20 per cent of its value for the year.

Consumer Goods

Both the listed stocks within the Consumer Goods sector- namely Hutchings Biemer Ltd. and Uchumi Supermarkets Ltd. remained suspended for the entire year.

Consumer Services

Media & Advertising and Leisure, Entertainment & Hotels sub-sectors both fell 15 per cent in 2009 mirroring the performance of the wider Consumer Services sector which fell 14 per cent during the year. Technology was the best performing sub-sector within Consumer Services finishing down 2 per cent for the year and also outperforming both the benchmark indices for the year.

Within the Media & Advertising space, Nation Media Group Ltd. finished the year 18 per cent lower despite a 12 per cent growth in profits in its digital division. Looking ahead the company stands to benefit from a growing digital consumer base especially in the social media arena with the likes of Twitter and Facebook growing both in popularity and usage.

TPS (Serena) Ltd, the only listed stock in the Leisure, Entertainment & Hotels sub-sector, was down 14 per cent in 2009 losing half of its value in the first two months of the year before rallying 73 per cent by year-end. Despite the firm reporting a 58 per cent increase in its 2009 pre-tax profits and paying KES 1.25 per share in dividend, its stock finished the year in negative territory. However, an improving tourism industry (in particular continued growth in local tourism) is indication that the troubled market, following the 2008 political crisis and global financial crisis, is well on its road to recovery.

Access Kenya Ltd, within the Technology sub-sector, was the best performing stock within the broader Consumer Services sector returning a fall of 2 per cent for the year. The stock saw a sharp rise between February and June jumping 60 per cent before trimming those gains by 20 per cent by year end. In February Access Kenya Ltd. had acquired Satori Solutions, a mid-sized “Virtual ISP” to help capture the small and home office market. This acquisition has helped the company increase its market reach and revenues, further solidifying the company’s position as Kenya’s leading Internet Access and Communications Company.

Transport

The Transport sector rose 24 per cent in 2009 to become one of the best performing sectors for the year with Kenya Airways Ltd. up 25 per cent. The stock had been, however, down 31 per cent in the first two months of 2009 before rallying 83 per cent in the following ten months.

Despite a pre-tax loss of KES 5.66 billion in 2009 (owing primarily to fuel hedging) compared to a pre-tax profit of KES 6.52 billion in 2008 the company’s share price performed well during the year. The company’s underlying performance however will continue to remain vulnerable to changes in world fuel prices where a 1 per cent increase in fuel prices adversely affects profitability by KES 269 million. In addition to this are the fluctuations in the strength of the Kenya shilling against the dollar. However, the company has made significant acquisitions in the region with its 49 per cent stake in Tanzania’s Precision Air having brought in KES 62 million in profits in 2009 alone.

The company has also increased its capital spend during the year investing in a state-of-the-art system that will assist in the tracking of cargo as well as integrate the company’s operations with its cargo system to bring efficiency within the entire cargo handling process. This should help grow revenue as the cargo division contributes over KES 7 billion to the airline’s annual turnover.

Express Kenya Ltd. fell 38 per cent for the year despite getting back to profitability following losses in 2008. The company posted pre-tax profits of KES 26 million following a pre-tax loss of KES 53 million in 2008. However, this improvement in performance seemed to have made little impression on investors as the stock continued a steady decline throughout the year.

Utilities

Utilities fell 14 per cent for the year continuing its downward trend from 2008. However, the adverse sector performance seemed to have bottomed in February/ March as was the case for most other sectors and the overall market.

KenGen Ltd. fell 19 per cent in 2009 dropping sharply by 35 per cent in the first two months of the year before rising to finish 25 per cent up for the remainder of the year. Pre-tax profits were up 48 per cent in 2009, from KES 3.1 billion in 2008 to KES 4.6 billion, but dividend per share fell during the same period from KES 0.9 to KES 0.5 spooking investors and contributing to a 19 per cent drop in share value. This, however, did not prevent the company raising KES 24 billion in debt finance (well over its original target of KES 14 billion) to be invested in energy generation to add to its already existing renewable energy generation sources including Geothermal, Wind and Hydro. The company produces about 80 percent of Kenya’s electricity output, which is mostly generated by hydropower dams.

KPLC Ltd. was up 29 per cent for the year with pre-tax profits up 75 per cent rising to KES 4.8 billion from KES 2.7 billion the previous year while the dividend per share for the same period doubled from KES 4 to KES 8. Investors seemed to have taken well plans by the corporation to restructure its capital base through conversion of government owned preference shares into ordinary shares and to float a share rights issue to raise between KES 7 billion and KES 10 billion. This was despite the dilution of existing share ownership that would follow such a move.

Conclusion

2009 proved to be a better year for most sectors and sub-sectors as well as the benchmark indices- the NSE-20 index and NSE All-share index than 2008. With the exception of the Banks sub-sector and wider Financial sector both which finished in positive territory in 2008, all other sectors and sub-sectors fell during that year.

2009, however, saw most sectors and sub-sectors finish the year ‘in the green’ as the economy bottomed out and the overall stock market reached its trough in February/ March 2009. Since then most sectors have recovered as has the country’s real GDP which has risen higher in 2009-at 2.6 per cent as opposed to 1.7 per cent in 2008.

Not surprisingly, Banks sub-sector and Financials sector- which were the out-performers in 2008 proved to be the worst performing sub-sector and sector in 2009 respectively. In particular Equity Bank Ltd. (which had been significantly over-valued) lost almost its entire value in 2009 and given its heavy weighting within both the composite indices dragged the market downwards. This was particularly so in the earlier part of the year.

Agriculture, Telecommunications and Transport proved to be the out-performers for the year beating both the benchmark indices at 7 per cent while Energy, Automobiles, Consumer Services, Utilities and Financials were the under-performers with Financials dropping a whopping 67 per cent.

Agriculture stocks proved to be the biggest movers on the upside with Williamson Tea Kenya Ltd. and Kakuzi Ltd. gaining 159 per cent and 38 per cent respectively. Kapchorua Tea Co. Ltd. was not far behind closing 26 per cent up for the year. Other market leaders during 2009 were in the Industrials space with Athi River Mining Ltd. and BAT Kenya Ltd. closing the year higher at 23 per cent and 36 per cent respectively. Safaricom Ltd. within the Telecommunication sector also closed well at 26 per cent as did the Transport sector constituent – Kenya Airways Ltd. which finished the year 25 per cent higher.

The market’s worst performers were mainly in the Financials space with Equity Bank Ltd., Centum Investment Ltd. and Olympia Capital Holdings Ltd. losing 92 per cent, 40 per cent and 35 per cent of their values respectively. The Agriculture stock- Eaagads Ltd. lost 45 per cent of its value while the Industrials stock- Unga Group Ltd. fell 34 per cent during 2009. Express Kenya Ltd- a Transport sector stock fell 38 per cent.

However, the market seems to have found its bottom in February/ March and improving visibility means it is well on the road to recovery.

Appendix

NOTE: Performance for the year is that of the financial year ending in that calendar year. Where the financial year ends in the first three months of the relevant calendar year, the company performance is that of the financial year ending in the first half of the following calendar year.

Example:

If the financial year of a company ends, say in March of 2009, the performance of the company considered in the analysis above for year 2009 is that ending in the financial year ending March 2010

Table 1: Re-configuration of the sectors on the Nairobi Stock Exchange (NSE)

NSE sector reclassification

Sector

Sub-sector

Stock

Agriculture

Rea Vipingo Ltd.

Sasini Tea & Coffee Ltd.

Kakuzi Ltd.

Williamson Tea Kenya Ltd.

Kapchorua Tea Co. Ltd.

Kenya Orchards Ltd

Limuru Tea Co. Ltd

Eaagads Ltd.

Industrials

Building & Construction

Athi River Mining Ltd

Bamburi Cement Ltd.

E.A Portland Cement Co. Ltd.

Beverages

E.A. Breweries Ltd.

Food Processors

Mumias Sugar Company Ltd.

Unga Group Ltd.

Other Industrials

British American Tobacco Kenya Ltd.

E.A. Cables Ltd.

Sameer Africa Ltd.

Crown Berger (K) Ltd.

Eveready East Africa Ltd.

A. Baumann & Co.Ltd.

Financials

Banks

Barclays Bank of Kenya Ltd.

CFC Stanbic Bank Ltd.

Kenya Commercial Bank Ltd.

National Bank of Kenya Ltd.

Diamond Trust Bank of Kenya Ltd.

NIC Bank Ltd.

Equity Bank Ltd.

The Co-operative Bank of Kenya Ltd.

Standard Chartered Bank Kenya Ltd.

Insurance

Pan Africa Insurance Holdings Co. Ltd

Jubilee Insurance Co. Ltd

Kenya Re-Insurance Co. Ltd.

other Financials

Housing Finance Ltd.

Centum Investment Ltd.

Olympia Capital Holdings Ltd

City Trust Ltd.

Oil & Gas (Energy)

BOC Kenya Ltd

Kenya Oil Ltd.

Total Kenya Ltd.

Carbacid Investments Ltd.

Telecommunications

Safaricom Ltd.

Automobiles

Marshalls E.A. Ltd.

Car & General Ltd.

CMC Holdings Ltd.

Consumer Goods

General Retailers

Uchumi Supermarkets Ltd. Suspended

Hutchings Biemer Ltd. Suspended

Consumer Services

Media & Advertising

Nation Media Group Ltd

ScanGroup Ltd.

Standard Group Ltd.

Leisure, Entertainment & Hotels

TPS (Serena) Ltd.

Technology

Access Kenya Group

Transport

Kenya Airways Ltd.

Express Ltd

Utilities

Kenya Power & Lighting Co. Ltd.

KenGen Ltd.

Table 2: Sector index and benchmark index performance (2009)

DATE

31/12/2008

30/1/09

27/2/09

31/3/09

30/4/09

29/5/09

30/6/09

31/7/09

31/8/09

30/9/09

30/10/09

30/11/09

31/12/09

annual % change

Agriculture

54

49

42

47

48

49

54

52

51

55

65

62

15

Building & Construction

82

76

63

61

63

74

75

80

82

80

-2

Beverages

86

81

60

68

71

89

83

85

83

86

0

Food Processors

48

35

25

32

29

42

41

48

46

45

43

47

-2

Other Industrials

75

68

70

73

77

86

88

86

85

83

84

85

13

Industrials

80

75

58

63

64

65

80

79

80

79

81

1

Banks

103

94

70

30

29

30

36

35

30

31

32

-69

Insurance

66

63

47

54

59

61

65

62

55

52

58

59

-11

Other Financials

57

46

34

36

35

42

49

41

38

35

38

40

-30

Financials

101

92

68

31

30

32

37

36

31

32

33

-67

Energy (Oil & Gas)

73

65

59

62

70

66

69

65

63

62

60

61

-16

Telecommunications

49

43

34

41

39

37

44

51

49

50

54

66

61

24

Automobiles

85

77

59

69

64

62

70

66

61

57

62

61

-28

Consumer Goods

-

Media & Advertising

52

50

41

45

47

46

19

48

44

45

44

-15

Leisure, Entertainment & Hotels

67

61

33

38

46

49

57

54

53

56

54

51

57

-15

Technology

89

68

77

83

97

109

102

89

87

86

87

-2

Consumer Services

57

54

42

47

49

50

30

52

51

48

49

-14

Transport

45

44

31

35

34

38

39

36

32

38

51

56

24

Utilities

58

52

39

47

45

56

54

47

45

44

47

50

-14

NSE-20 share index

68

61

48

54

55

64

63

60

58

60

62

63

-7

NSE All-share index

76

72

57

59

60

61

72

71

69

67

68

69

71

-7

Table 3: Best and worst-performing stocks in 2009

Best performing stocks

% annual change

Worst performing stocks

% annual change

Agriculture

Kakuzi Ltd.

38

Eaagads Ltd.

-45

Williamson Tea Kenya Ltd.

159

Kapchorua Tea Co. Ltd

26

Industrials

Athi River Mining Ltd

23

Unga Group Ltd.

-34

British American Tobacco Kenya Ltd.

36

Financials

Equity Bank Ltd.

-92

Centum Investment Ltd.

-40

Olympia Capital Holdings Ltd

-35

Telecommunications

Safaricom Ltd.

26

Transport

Kenya Airways Ltd.

25

Express Kenya Ltd

-38

[1] While the weighting of Financials within the NSE All-share index stood at 64 per cent in December 2008, this had fallen to 53 per cent by the end of 2009. Equity Bank’s weighting within the Banks sub-sector had also fallen from 73 per cent in December 2008 to a mere 19 per cent by the end of 2009.

About the Author

Patrick Kiragu Mwangi

Management Consultant

B.A Economics- Egerton University, Kenya

BSc(Hons) Applied Accounting- Oxford Brookes University, UK

M.A Management (Financial Analysis)- University of Northampton, UK

ACCA II