Safaricom, The Banks and U.S Retail Earnings on Markets.
Let's look at the earnings for Equity Bank, Co-Op bank, Standard Chartered and U.S retail giants. We also check on Safaricom and the hit on the NSE.
Hey Hisa fan,
Another week, a new reason to invest! The local markets were mixed as we approached books closure for some of the listed banks, and investors weighed heavily to take advantage of Safaricom’s [NSE: SCOM 0.00%↑] share decline a week earlier. Local markets were also moved with the release of local banking 1Q23 earnings which showed banks increasing in sales.
Global markets however posted solid gains for the week, with the S&P 500 Index breaching the 4,200 level in intraday trading for the first time since late August. Strong gains were seen on the shares of Google parent company Alphabet Inc [GOOG 0.00%↑] and Facebook parent firm Meta Platforms Inc. [META 0.00%↑].
Key Earnings Brief.
During the week, three listed banks released their Q1’2023 financial results all recording an increase in their Core Earnings Per Share.
Equity Group Holdings Plc [NSE:EQTY] - Equity Group Holdings Plc posted KES.12.8 billion in 1Q2023 Profit After Tax (PAT) representing a 7.6% increase from the compared to the KES.11.9 billion 1Q2022. Earnings Per Share (EPS) for the group increased to KES.3.26 from KES.3.06 over the same period in 2022.
The group’s holdings in Government securities was down 7.7% during this quarter, from KES.233.9 billion in 1Q22 to KES.215.9 billion, in line with the Group’s strategy to focus their capital allocation on private sector lending rather than the Government.
Total Interest Income for the group was up 21.3% to KES.32.4 billion driven by a 21.1% growth in interest income from loans and advances that grew to KES.20.7 billion. Customer deposits was up 22.2% to KES.1.1 trillion buoyed by the increased deposits across the Group’s subsidiaries.
Gross Non-Performing Loan (NPL) Ratio increased from 8.6% in 1Q2022 to 9.1% attributable to challenging macroeconomic environment. The group did not declare any interim dividend.
Alibaba Group Holding Limited [NYSE: BABA] - Alibaba Group Holding posted an earnings of $1.56 per share on revenue of $30.32 billion for the fiscal fourth quarter ended March 2023. The consensus earnings estimate was $1.35 per share on revenue of $30.38 billion.
Revenues of RMB 208.2 billion ($30.32 billion) rose 2% from the year-ago fiscal quarter’s level. International Commerce, the segment comprises marketplaces operating in the international retail and wholesale commerce markets. Alibaba generated RMB 18.5 billion ($2.7 billion) in revenues from the segment, which grew 29% from the year-ago fiscal quarter’s reported figure.
Cloud Computing generated revenues of RMB 18.6 billion ($2.71 billion), down 2% from the year-ago fiscal quarter’s reading. Digital Media and Entertainment revenues logged RMB 8.3 billion ($1.2 billion), increasing 3% from the year-ago fiscal quarter’s reported figure.
Short-term investments totaled $47.5 billion (RMB 326.5 billion) at the end of fourth-quarter fiscal 2023, up from $45.8 billion (RMB 315.9 billion) at the end of third-quarter fiscal 2023.
Other Key Earnings Updates.
Standard Chartered Bank Kenya [NSE: SCBK] - posted a 45.6% y-o-y improvement in Profit-after-tax profits to KES 4.0 billion, largely attributed to a 56% growth in Non-Funded Income (NFI) and a and 40.8% growth in Net Interest Income. Earnings Per Share (EPS) for the company stood at KES.10.55 from KES.6.87 over the same period in 2022. Gross Non-Performing Loan (NPL) Ratio - Declined to 14.2% (15% - Q1 2022) due to NPLs remaining flat and loan book growth.
Co-operative Bank of Kenya [NSE: COOP] posted a profit after tax of KES.6.1 billion in 1Q2023, representing a 5.2% year-on-year increase compared to the KES.5.8 billion 1Q2022. Earnings Per Share (EPS) for the group increased from KES.0.99 in 1Q2022 to to KES.1.04 in 1Q2023. Holdings of Government securities for the group declined 2.2% from KES.183.4 billion to KES.179.3 billion.
Target Corporation [NYSE: TGT 0.00%↑] - Target posted earnings of $2.05 per share on revenue of $25.32 billion for the fiscal first quarter ended April 2023. Analysts had estimated earnings of $1.74 per share on revenue of $25.36 billion. The company said it expects second quarter earnings of $1.30 to $1.70 per share and continues to expect fiscal 2024 earnings of $7.75 to $8.75 per share.
The Home Depot [NYSE: HD 0.00%↑] - Home Depot earnings for the three months ending in April were pegged at $3.82 per share, down 6.6% from the same period last year. The group revenues fell 4.2% from last year at $37.26 billion, missing analysts' estimates of a $38.3 billion.
Walmart Inc. [NYSE: WMT 0.00%↑] - Wallmart’s net income for the quarter ending 30th April 2023 fell to $1.67 billion, or 62 cents a share, from $2.05 billion, or 74 cents a share the company posted over the same period last year. Revenue grew 7.6% to $152.30 billion, as e-commerce sales climbed 26%. Walmart U.S. sales increased 7.2% to $103.90 billion, above expectations of $102.09 billion — and Walmart International sales jumped 12.0% to $26.60 billion to beat analyst expectations of $24.89 billion.
Coffee Break.
OpenAI CEO Sam Altman testified on Tuesday before the U.S. Senate Judiciary Committee regarding AI oversight. Sam Altman became a popular face of the AI revolution after his company OpenAI partnered with Microsoft to develop and launch the flagship conversation bot ChatGPT.
Here are some AI ETFS you can look at, some of them are available for you to buy on Hisa App:
Global X Robotics and Artificial Intelligence ETF [NASDAQ: BOTZ 0.00%↑] has gained +28.72% in 2023. It is also the largest AI ETF in the world.
ARK Autonomous Technology & Robotics ETF [BATS: ARKQ 0.00%↑] - has gained +19.26% in 2023.
iShares Robotics and Artificial Intelligence Multisector ETF [NYSEARCA: IRBO 0.00%↑] has gained 15.23% in 2023.
First Trust Nasdaq Artificial Intelligence and Robotics ETF [NASDAQ: ROBT 0.00%↑] has gained 18.31% in 2023.
Markets.
The U.S. stock markets closed lower for the week, with all three major indexes posting losses. The Dow Jones Industrial Average (DJIA) was up 0.4% to close the week at to 33,426.63, the S&P 500 added 1.6% to 4,191.98, and the Nasdaq Composite Index gained 3.0% to end the week at 12,657.90.
Overall, the U.S. stock markets are facing some headwinds, but there are also some positive signs. Investors will need to continue to monitor the economic data and geopolitical developments to assess the outlook for the markets.
Local Markets
The NSE 20 Share Index [NSE20] closed the week at 1467.83 points, down 4.38 points or 0.30% from the previous week's close of 1472.21 points. The NSE20 Share index is the most watched index of the NSE and tracks the performance of the 20 largest and most liquid stocks listed on the exchange.
The NSE All share index and the NSE25 share indices were however up, with NASI adding 4.94 points or 5.28% to close at 98.52 points and, the NSE25 share index gained 66.99 points or 2.67% to settle at 2571.76 points.
The Equity Market closed the week with 78.9M shares valued at KES.1.6 billion against 90.2M shares valued at KES.1.4 billion transacted the previous week.
The Kenya Shilling remained relatively stable against major international and regional currencies during the week, with the KES exchanging hands at 137.30 per US dollar.
What Top Cowries are we collecting this week?
Nvidia Corporation [NASDAQ: NVDA 0.00%↑] - Nvdia has confirmed to report earnings on Wednesday, May 24, 2023. The consensus earnings estimate is $0.91 per share on revenue of $6.52 billion, a decline of 21.3% year-over-year. We are watching on how the stock will perform.
Equity Group Holdings Plc [NSE: EQTY] - Equity bank posted impressive earnings on Thursday. The bank had its books closed last week on Friday, we will be looking at the bank’s share price this week and how the book’s closure will perform this week. Will it followKCB to slide lower?
Zoom Video Communications Inc. [NASDAQ: ZM 0.00%↑] - Zoom Video Communication will be reporting earnings today, Monday, May 22, 2023 after market close. Analysts estimate earnings of $0.99 per share on revenue of $1.08 billion, representing 0.6% year-over-year revenue growth. Will Zoom miss earnings considering the small earnings estimate?
Disclaimer: The writer of this article owns SCOM 0.00 , HAFR , EQTY 0.72%↑ , NVDA -0.72%↓ & AAPL 2.08%↑ shares. This article does not constitute any investment recommendations. Investors and the general public are advised to do their own research before making any investment decision.