Bank stocks hit by rate cap fail­ure

HF Group, KCB and Eq­uity take big­gest hits

Business Daily (Kenya) - - FRONT PAGE - Ge­of­frey Irungu girungu@ke.na­tion­media.com

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.

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