🦠Thanksgiving Omicron, Earnings & All About Markets.
Let's take a review into Omicron's declaration by WHO and how markets took a hit last week from this. Also, what's happening in markets?
Hey Hisa fan,
It’s the week of 1st December 2021, the week of good things, well and the week after the return of the world’s most dreaded virus in 2019/2020, the coronavirus. That’s right, the SARS Cov-19 has jumped back to haunt investors and of course, the global population.
The announcement of the new coronavirus by South African authorities and the World Health Organization (WHO) has hit on markets with investors saying signs that the new strain is spreading and questions over its resistance to vaccines could weigh on the so-called reopening trade that has lifted markets at various times this year.
As of Monday, the United Kingdom had led various regions including the E.U and North America in banning/restricting flights from South Africa, Namibia, Lesotho, Botswana, eSwatini and Zimbabwe following threats of the new variant.
Our take: Vaccine stocks like Moderna & Pfizer posted gains on Friday, business is back for pharma stocks. The new variant however doesn’t pose much risk to the already ailing global system despite being classified as “of concern”.
Local Banks Earnings:
Diamond Trust Bank Kenya Plc - [NSE: DTK]Diamond Trust Bank Kenya released their 3Q21 financials after market close on Thursday.
The group's total assets grew 10.26% to close the quarter at 434.39 billion (3Q2020: 393.96 billion)
Earnings per share was up 20% to 17.28 per share (3Q2020: 14.40)
Gross Non-Performing Loans (NPLs) were up 42.59% to Kes 25.72 billion (3Q20202: 18.04 billion)
Total Interest income was up 6.02% to Kes 25.13 billion (3Q2020: 23.69 billion)
Net Interest income grew 5.89% to Kes 14.73 billion (3Q2020: 13.91 billion)
Operating expenses (OPEX) for the group was down by a marginal 2.03% to Kes 12.11 billion (3Q2020: 12.34)
Profit Before Tax (PBT) for the period in review was up 12.52% at Kes 7.41 billion (3Q2020: 6.59 billion)
Profit After Tax (PAT) for the group was up 20.01% to Kes 4.8 billion (3Q2020: 4.025 billion)
Total comprehensive income for the period in review was at 15.33% at Kes 6.18 billion (3Q2020: 5.36 billion).
Earnings per share [EPS] for the group posted a 20% growth to Kes 17.28 per share (3Q2020: Kes 14.40)
No Interim dividend has been declared for the period in review.
DTB's shares closed Friday’s trading session unchanged at Kes 57.00.
Stanbic Bank Kenya - [NSE:SBIC]Stanbic Bank Kenya released their fiscal 3Q21 results early Friday:
Total assets for the company declined by 7% to Kes 295 billion.
Total operating income jumped 9% to Kes 17.5 billion
Total operating expenses (OPEX) for the bank was down marginally by 2% to Kes 10.5 billion.
Non-interest income for the bank was at 7.5 billion, a 4% change year on year.
Gross Non-performing loans were up 21% to Kes 9.8 billion.
Provision for loan loss was down 48% to Kes 1.5 billion.
Stanbic has posted a 43% jump in after-tax profit at Kes 5.1 billion.
Customer deposits were down 6% for the period in review at Kes 212.9 billion.
Earnings per share (EPS) for the bank was up 43% to Kes 23.97 per share.
Stanbic bank did not declare a dividend for the period in review and closed trading with a marginal 0.82% decline in share prices at Kes 91.00 per share.
HF Group Plc - [NSE: HFCK]HF Group Plc released its fiscal 3Q21 financials on Friday, here's a brief:
Total assets were down 5.28% to Kes 52.20 billion (3Q2020:55.11 billion)
Total liabilities were down 2.97% to Kes 44.20 billion (3Q2020: 45.55 billion)
Total interest income was down 18.35% to Kes 2.96 billion (3Q2020: 3.62 billion)
Net interest income for the group was down 14.8% to Kes 1.38 billion (3Q2020: 1.62 billion)
Operating income for the period in review was 9.42% lower at Kes 1.83 billion (3Q2020:2.03 billion)
Loan loss provisions for the group was down 61.54% to Kes 169.7 million (3Q2020: 441.2 million)
Loss Before Tax (PBT) for the quarter posted a marginal improvement of 21.79% of Kes at -525.35 million.
HF Group Plc posted an after-tax loss of Kes 569.92 million (3Q2020: -728.03 million).
Earnings per share for the company was at Kes -2.53 per share (3Q2020: Kes -1.98 per share).
Thanksgiving - Not Markets.
U.S Markets were mixed during the week, markets started their week early but posted a crash on Friday’s shortened trading with the down dropping by over 800 points. This was fueled by the Omicron announcement, the declining energy and stock prices.
The Dow Jones Industrial Average was down 2.0% to close the week at 34,899.34, the S&P 500 dropped 2.2% for the week at 4,594.62 with the Nasdaq Composite dropping 3.5% during the week to close at 15,491.66 basis points.
Local Markets - Benchmarks on the Nairobi Securities Exchange extended their decline for the third straight week, weighed down by Safaricom Plc. The All-share index of the Nairobi Securities Exchange (NASI) was down by 2.71% to close the week at 164.77 points from last week’s figure of 168.43 points.
The NSE 25 and the NSE 20 share indices followed NASI, shedding 1.72% and 0.39% to close the week at 1,886.35 points and 3,668.11 points respectively.
What cowries are we collecting this week?
Nairobi Securities Exchange [NSE: NSE] - Second week in a row, the NSE is on our top watch. NSE declared a special dividend on Friday after the market closed. This comes just one week after the exchange commenced intra-day trading. More goodies to shareholders.
Safaricom Plc [NSE: SCOM] - The largest company on the NSE has been on a decline, dragging the whole market with it. Safaricom is down 13% month-on-month. With the market declining, will SCOM pick up the pace or extend the decline through the week.
Salesforece.com - [NYSE: CRM] - Salesforce which sells enterprise software and cloud-based services for customer relationship management to corporate clients, will be reporting its quarterly earnings on Tuesday, Nov. 30, after the market closes. Salesforce completed the acquisition of Slack Technologies for $27.7 billion over the summer. Salesforce stock is up 27% this year, outperforming the tech-heavy NASDAQ Index.
PS: Let’s talk Hisa, if you received an update, trading is finally coming to your Hisa App! On 1st December 2021, you will be able to begin accessing your favourite stocks on the U.S Stock markets.
If you’re yet to join Hisa App, click the button below to get started.👇🏼👇🏼
Disclaimer: 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.