During the month of January, the indicative indices opened the year on a negative with both the NSE-20 and NASI declining 1.12% and 1.22% m/m to close at 1657.22 and 125.91 respectively. Foreign investors remained as net sellers with the selling position increasing by 71.17% to KES 2.86Bn, if the same trend continues the total foreign net selling position for 2023 is likely to surpass the KES 24.04Bn recorded in 2022.

Equity turnover increased by 74.62% m/m to KES 7.80Bn from KES 4.47Bn in December, while volumes traded shot up 103.54% to KES 332.34Mn. We attribute the increased market activity to focus on blue chips led by banking sector counters. Market capitalization declined 1.23% m/m to KES 1961.63Bn mainly supported by a late rally from SCOM. We expect market activity to continue increasing for the next four months (To remain above KES 9.00Bn/month) owing to the commencement of the FY’22 earnings season with expectations of higher dividends in the banking sector.


What does February Hold ?

FY’22 Earnings Season - In the month of January, we expect FY’22 results from BAT which is a perennial dividend-paying counter, however, the increased cost of input raw materials coupled with tough economic times reducing sales revenue are likely to see a reduction and/or slower profit growth. That notwithstanding, we expect the counter to still pay an additional final dividend of KES 50.00 taking the total dividend to KES 55.00.