KCB market value falls below Sh100bn as bear run deepens
Thursday May 11 2023
KCB Group’s market value has dropped below Sh100 billion amid a deepening market selloff that has generated major paper losses for most firms listed on the Nairobi Securities Exchange.
The lender’s share price dropped 2.64 percent on Wednesday to close at a new 52-week low of Sh29.45.
This saw its market value drop further to Sh94.6 billion. The bank had maintained a market capitalization of more than Sh100 billion since 2019 when it acquired the National Bank of Kenya through a share swap.
KCB’s share price is down 19.3 percent over the past 12 months.
The bank is among the counters on the NSE that have been battered amid a flight of foreign investors, with the selloffs continuing despite higher corporate earnings and dividends.
Read: KCB beats Safaricom in net assets
All of the listed banks posted higher earnings for the year ended December. The majority also declared higher dividend payouts.
KCB however bucked the trend, cutting its dividend to Sh2 per share from the previous year’s Sh3 per share. The bank however grew its net income 19.5 percent to Sh40.8 billion.
KCB has disclosed that it spent Sh25.1 billion last year to acquire an 85 percent stake in DRC lender Trust Merchant Bank (TMB).
Some of the bear runs has been attributed to the weakening of the shilling and difficulty in accessing dollars, factors which are hurting returns and causing a flight of some foreign investors while making it difficult to attract new capital to the market.
A total of 23 stocks were in the red on Wednesday including blue-chip firms like Co-operative Bank of Kenya, Equity Group and Safaricom which on Thursday will announce its results for the year ended March.
There were 14 stocks that posted gains, most of them being small firms such as Home Afrika, Olympia Capital, Eveready East Africa and Crown Paints.
Read: NSSF sells Sh837 million KCB shares in rare move
While the bear market has generated significant paper losses, it has raised the dividend yields for income-focused investors taking positions for the long term.