Owners of bank shares have lost Sh31 billion over the past month as investors take profits from the rally that followed the removal of the cap on commercial lending rates. FILE PHOTO | NMG Owners of bank shares have lost Sh31 billion over the past month as investors take profits from the rally that followed the removal of the cap on commercial lending rates.
All the 10 banks have reported declines in share prices between January 20 and Thursday on what stock dealers linked to increased supply of the lenders’ stocks amid this demand ahead of the results announcement season, hurting investors.
Banking stocks together with the Safaricom shares account for about 75 percent of the market value of the Nairobi Securities Exchange #ticker:NSE (NSE), and the lenders’ share fall has affected the bourse.
But the losses are yet to wipe out the billions of shillings in stock gains that followed the surge in banking shares from October 11 when news of the intention to repeal the cap that had curbed lender’s profit growth leaked.
High profile investors like the Kenyatta family, the family of former Central Bank of Kenya governor Philip Ndegwa, Co-operative Bank #ticker:COOP CEO Gideon Muriuki and Equity #ticker:EQTY CEO James Mwangi have shed tens of millions over the past month.
Investors in the Equity stock have shed Sh6.8 billion in the past month after the price fell from Sh51.75 to Sh49.95.
This has seen Mr Mwangi, who holds five percent of the shares, shed Sh339.6 million to leave his portfolio in the bank at Sh9.42 billion.
Mr Muriuki has seen his Co-op Bank shares fall by Sh115 million to Sh1.7 billion. This was on account of the lender’s share price dropping 5.9 percent to Sh14.85.
The Kenyatta family, which holds 197.7 million shares in NCBA #ticker:NIC, has shed Sh128.5 million while the Ndegwa family has lost Sh104.2 million. The share of NCBA dropped marginally by 1.8 percent to Sh35.80.
AIB Capital head of research Sarah Wanga said the current decline was driven by profit-taking as investors rush to make money before banks announce results from next month.
“Many investors, mostly the foreigners, want to make money now before the results season sets in. They will then take fresh positions depending on the performance for last year and plans of executives,” said Ms Wanga.Banks have up to the end of March to release their full-year results, the last under the regime of controlled interest rates.KCB #ticker:KCB […]