These 5 Firms Accounted For 70% Percent Of The Total Value Of The Kenyan Stock Market In Q2 2019

By  |  August 19, 2019

The year 2019 is winding down at quite some pace and as things approach the frantic end of the year, it is becoming increasingly clear that blue-chip companies in Kenya are not only winning in the Nairobi Securities Exchange but also keeping Kenya’s stock market firmly in their grasp.

It is becoming evident that with each passing day, blue-chip companies are becoming stronger than ever and five of such companies in Kenya can be thought to own the Nairobi Securities Exchange, given that it has now come to light that, between them, they accounted for a whopping 70 percent of the total value of Kenya’s stock market for the second quarter of 2019.

Per Capital Markets Authority’s (CMA) latest Soundness Report, the top five companies by market capitalisation accounted for a combined 70.80 percent of the total market value in the second quarter of 2019, underlining their grip on the Kenyan securities market. It is the highest figure the companies have posted together in the last four quarters.

The five companies in question are not exactly lightweights that have come to take everyone by surprise, though. They are well-established powerhouses that have been on the apex of things for some time now.

According to the CMA, Safaricom, Equity Bank, Kenya Commercial Bank, Cooperative Bank, and East Africa Breweries Ltd., are the five companies dominating the market as they collectively accounted for the bulk of the business the market witnessed over the last year.

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In the first quarter of 2019, the five companies made up 67.5 percent market capitalisation; up from the 65.8 percent they collectively contributed in the last quarter of 2018. More so, between July and September 2018, the five blue-chip stocks made up 68 percent of the market value.

Kenya Commercial Bank (KCB), the biggest bank in Kenya by assets, put this stock market dominance into perspective when earlier when its numbers for Q1 and Q2 of 2019 indicated positives on the business end of things. Compared to the same period the previous year, the profits of the KCB Group profit grew 5% in the first six months of 2019, hitting KES 12.7 Bn (USD 127 Mn).

With those numbers, KCB edged the closest competition, Equity Group, who aren’t doing badly on their part, having recorded a net profit of KES 11.92 Bn during the same period.

However, market capitalisation on the Kenyan stock market — which is a product of share prices multiplied and issued stock — slid 3.3 percent to KES 2.2 Tn, having hit KES 2.3 Tn previously.

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