Bank stocks hit by rate cap failure
HF Group, KCB and Equity take biggest hits
Prices of nearly all listed banks fell in the ive days to last Friday on Parliament’s failure to review the rate cap, with three extending the losses yesterday.. …
Prices of nearly all listed banks fell in the five days to last Friday on Parliament’s failure to review the rate cap, with three extending the losses yesterday.
The biggest loser was HF Group whose stock fell 9.15 per cent. The largest commercial banks by market cap and total assets, Equity and KCB Group, shaved off 0.56 and five per cent respectively. Only Equity and National Bank managed marginal recovery yesterday.
NIC Bank share fell 4.84 per cent while Stanbic lost four per cent during the five days. Other banks whose share prices fell were Barclays, DTB and Stanchart while that of Coop Bank gained only to lose yesterday.
In its analysis, Standard Investment Bank attributed the latest fall in prices at the Nairobi Securities Exchange to the National Assembly’s move to keep the restriction on the lending rate unchanged. Parliament, however, reviewed the floor on deposit rates, allowing each bank to fix it.
“Generally, banks have continued to experience downward pressure, as investors react negatively to Parliament’s rejection of the proposed rate cap repeal as envisioned in the Finance Bill 2018,” said SIB in its analysis. KCB’S five per cent share price fall wiped out the gains earned year-to-date mainly on foreign investor selling.
“Overall, investors maintained their bearish outlook on bank stocks due to the absence of the rate cap repeal as envisioned in Finance Bill 2018,” said SIB.