Many counters registered lower trading prices in the critical morning trading session after what analysts opined was profit taking and market correction after the rally on Monday and Tuesday. The stock run saw NSE touch a four-and-a-half-year high.
But, people watching the market were optimistic as the NSE 20 share Index gained over 850 points since January and over 1,700 points in the one-year period since March 2012.
Kuria Kamau, a research analyst at Kestrel Capital, said that they expected it to be a small detriment on the way provided that companies continued to show nice profits like Britam and Diamond Trust Bank showed on that day. The market fundamentals looked good.
DTB and Britam declared tremendously improved earnings for last year and improved take-home for owners. Britam shareholders’ dividend rose 66 per cent to KSh. 0.25 a share. DTB shareholders would now earn a dividend of KSh. 1.90 per share, which had gone up by 20 cents.
Standard Investment Bank analyst Eric Musau was of the opinion that the unpredictability of the market would proceed even after companies announced their results and closure of books by others. This was because of the risk of political uncertainty in the country as the presidential poll petition had not yet been decided.
Mr Musau said that there was bound to be some pull back as some of the counters were overvalued and any time there was a blip in the market they were inclined to come down. Another factor was that because of the growth of the market this year there was bound to be some profit taking.
The NSE 20 share index closed on Wednesday at 4,911 points, which was down by 75 points on Tuesday’s 4,985.9 points. It dropped another 79.60 points on Thursday to close at 4,831.85.
The largest losers in Thursday’s trading were CIC Insurance which came down by 7.96 per cent, Centum by 7.25 per cent, East African Cables by 7.12 per cent, while Barclays dropped by 7.10 per cent.
While 33 counters were in the negative in intraday trading, only 9 registered price increase with Uchumi in the lead which traded 6.7 per cent at KSh. 21.75 which was up from Wednesday’s closing price of KSh. 20.50. Market capitalisation dipped to KSh. 1,572.885 trillion from Wednesday’s KSh. 1.6 trillion.
In the currency market, the shilling remained firm against the dollar in the initial trading, consolidating in the 85.30/35 range. Dealers at CBA stated that the shilling’s immediate gains had induced a rise in demand for dollars and hence slowed down its rise against the dollar.
As per the CBK data, the shilling exchanged at an indicative mean rate of 85.34 units to the dollar which was just 0.02 cents lower than Wednesday’s mean of 85.32 units.
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