NMG, Kenya Commercial Bank (KCB), I&M Bank and Equity Bank have outperformed their listed peers in capital gains at the Nairobi bourse since mid-February, riding on healthy dividends and positive corporate announcements.
Banks over the past six weeks, been releasing their full-year results. In the period, the KCB share has gained 28.2 per cent to Sh33, Equity is up 21.5 per cent to Sh32.50 and I&M Bank 20.1 per cent to Sh92.50.
KCB announced three weeks ago it will pay shareholders a dividend of Sh3 per share for the 2016 financial year, up from Sh2 per share in 2015. This was despite reporting a flat net profit of Sh19.7 billion for the year.
The Sh9.1 billion total dividend pay-out is the largest ever by a financial services firm in the country.
“The rebound in some bank stocks is a reaction to the full year 2016 results which have raised investors’ appetite due to the improved dividend yields,” said Kingdom Securities senior analyst Mercyline Gatebi.
“However, the price rebound is likely to be short-term in nature as the fundamentals don’t support the same.