Taking stock of the stock market

January 10, 2025

Hello 👋🏾, it’s Brian from The Kenyan Wall Street!

Thank you for joining us for today’s edition of The Daily Brief! With 35,000+ subscribers from over 80 countries receiving this newsletter.

Top Stories 

💹 Rights Issues Shape the NSE in 2024 as IPO Drought Continues

The Nairobi Securities Exchange (NSE)

The 2024 equities market was marked by four rights issues with initial public offerings (IPOs) extending an almost decade long drought at the Nairobi Securities Exchange (NSE).

Listed companies that announced rights issues in the year include:

🔸Standard Group

🔸HF Group

🔸Sanlam Kenya

🔸Family bank

These firms sought to boost their balance sheets while armed with growth and expansion strategies.

What's a Rights issue? 🤔 

“A rights issue is an offer of additional shares to existing shareholders of a company directly, without going through the secondary market at a reduced price.”

IPOs at the Nairobi Securities exchange remained in a comatose state in 2024 amid a surge in benchmark indices to record highs, with the last company listing shares in October 2015.

Unlike IPOs, a Rights Issue is offered to existing shareholders in proportion to their holdings at the moment, usually at a discounted price for a specified time frame, after which it is returned to normal.

Today's Poll

How do you think the Kenyan stock market (NSE) will perform this year?

Login or Subscribe to participate in polls.

Yesterday's Poll Results 

Do you think raising the limit of tax-free pension contributions will help income earners feel less burdened?

🟨🟨🟨🟨🟨⬜️ Yes, it is commendable (47.83%)

🟩🟩🟩🟩🟩🟩 No, it is a farce (52.17%)

🏗️ Mombasa Port Reaps from Red Sea Crisis, Posts 133% Jump in Traffic

Cargo handling at the port

🔸Ship Traffic through the Mombasa Port jumped by 132.9%, an increase of of 280,593 twenty-foot equivalent unit (TEUs), to 491,666 TEUs in 2024.

🔸The Red Sea crisis due to the spate of attacks perpetrated by Yemeni-based Houthi militants led to delays and extra costs for shipping companies.

🔸Major shipping lines chose Mombasa port as their transshipment hub thus enabling smaller feeder vessels to serve eastern and southern Africa ports.

🔸Mombasa port handled 41.1 million tons of cargo in 2024.

🔸This was a significant rise from the 35.98 million tons registered in the corresponding period in 2023.

🧐 Uganda Forwards Audit on USh 60bn Central Bank Heist to CID

The Bank of Uganda (BoU)

Last November, media reports emerged that that the Uganda’s Central Bank had been hacked in August, leading to the loss of over UShs. 60 billion. The sophisticated cyber heist involved the diversion of payments, such as a US$ 6.134 million payment meant for the World Bank that was instead sent to a Tokyo-based company.

The Bank of Uganda locked horns with the Ministry of Finance over the heist and the subsequent audit. It has since said that it has recovered US$ 8.2 million of the stolen funds.

The country's legislature has already forwarded the Auditor-General’s report on the UShs 60bn (US $ 16.23mn) Bank of Uganda heist to the Directorate of Criminal Investigations “for further investigations”.

🤝 The Mergers, Acquisitions, and Deals That Shaped 2024

Mergers and deals

The start of the year was characterized by elevated inflation, weaker shilling and high interest rates which called for extra measures to stay afloat from the volatility. Towards the end of the year, the country has however witnessed some ease albeit at a slow pace with inflation dropping from a high of 6.9 per cent in January to 2.8 per cent in November. The year 2024 also saw a number of companies restructure their businesses for growth, synergies, market expansion, and diversification.

Some of the mergers that made headlines include :

🔸Access Bank taking over National Bank

🔸The Acquisition of Lipton Tea

🔸NCBA’s acquisition of AIG

Stories you may have missed 

Kenya Ratifies Treaty to Prevent Tax Avoidance by Multinational Firms

Kenya has ratified a treaty that blocks multinational firms from abusing taxation loopholes and shifting profits, the OECD has confirmed.

kenyanwallstreet.com/kenya-ratifies-treaty-to-prevent-tax-avoidance-by-multinational-firms

Nairobi Bans Hawking Along Major Streets

Nairobi has issued a notice to hawkers ordering them to vacate major streets along various roads in the Central Business District (CBD).

kenyanwallstreet.com/nairobi-bans-hawking-along-major-streets

Shell to Depreciate US$ 400mn in 'Unfeasible' Namibia Oil Discovery

Shell has said that it will write down US $400mn on an oil discovery in Namibia after deeming it "commercially unfeasible."

kenyanwallstreet.com/shell-to-depreciate-us-400mn-in-unfeasible-namibia-oil-discovery

Pension Contributions' Tax Free Limit Raised by 50% to Address Inflationary Burden

RBA has announced that amendments to pension laws, which include raising the tax deductible contribution limit are set to be implemented.

kenyanwallstreet.com/tax-free-pension-contributions-cap-raised-by-50-to-address-inflationary-burden

Opinion and Commentary

Key Highlights in Kenya’s Startup Scene in 2024

The year for tech began on a depressing note when B2B e-commerce startup - Marketforce - downscaled operations in three of its five markets.

kenyanwallstreet.com/key-highlights-in-kenyas-startup-scene-in-2024

Video of the Day

“What improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”

~ Adam Smith

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