💼The Banker, The Crypto Constitution & The Investor.
Few lads thought they'd buy an original copy of the U.S constitution with Crypto! Also, what are central bankers saying.
Hey Hisa fan,
When investing, growth will remain the most important pivot and that pivot is what most investors were looking at throughout the week and throughout their entire lifetimes on the market.
Earnings releases continued to pour out on the market with Alibaba being a top watch for investors in the large caps after delayed financials. Also on investors watch for the week was news surrounding the possibility that U.S President Joe Biden will be making his decision on the appointment of the Federal Reserve chair with the term of current fair Jerome Powell coming to a close.
On the far close, what kept investors on the watch was the resurgence of Covid-19 concerns in Europe & China, and the possibilities of more lockdowns following Austria’s announcement to go into nationwide lockdown.
The Bankers.
Manners maketh man, but so does money, and markets across the globe have this in plenty. From EV companies listing and dumping, to billionaires waging online wars with Bernie Sanders, this was a week on a roll.
ECB Chair Christine Legarde and the Bank of England governor Andrew Bailey reiterated that it is not their job to guide financial markets on interest rates, hitting back against criticism that they had misled investors in earlier monetary decisions.
The East was calm though, for the week, the Bank of Japan (BoJ) governor Haruhiko Kuroda in a statement to business leaders indicated that the bank was committed its dovish stance, which led the yen to weaken to around JPY 114.5 against the U.S. dollar from about JPY 113.9 at the end of the prior week. The People’s Bank of China (PBoC) which has been at the forefront of investors watch globally continued to signal its support for the Chinese economy as it unveiled its latest targeted lending program, this time aimed at the domestic coal sector with RMB 200 billion in financing.
What’s up with this?
The actions of a country’s central banks have for long been seen as the definitive direction to the economic projection and the overall hammer for the financial markets. This was stamped during the great recession when central banks weighed in and held financial markets by buying debts/investing in collapsing companies/sectors that had the highest weight on the economy.
Christine Legarde and the European compatriots have started a new wave that aims at removing this attachment to Central Bankers from capital markets. How will this pun out you may ask? A circle’s points must touch, capital markets and central banks are like two lines that form a circle.
Coffee Break….Crypto Constitution
Decentralized autonomous organizations, or DAOs, are all the rage at the moment. We’re seeing explosive growth in this sector as people experiment with building companies on top of tokens and smart contracts.
In this age of DAO, a team called the ConstitutionDao had raised about $47 million through a partnership with Juicebox, in a bid to buy one of the last remaining original, rare copies of the U.S constitution; in fact, the last privately held copy of the U.S constitution.
Well, Citadel CEO Ken Griffin won the auction after he outbid the group of cryptocurrency investors to win a $43.2 million first-edition copy of the U.S. Constitution. He intends to lend it to a free Arkansas art museum and earn for generations to come….Money maketh man.
Earnings.
KCB Group Plc [NSE:KCB]Kenya’s second-largest lender by balance sheet released financials which showed the lender’s 3Q21 net earnings were up 131% backed by clear signs in economic recovery from the hit taken during the coronavirus pandemic.
Net profit for the period was up 131% to Kes 25.2 billion (3Q2020: 10.9 billion)
The balance sheet was up 15% to Kes 1.12 trillion (3Q2020: 972 billion)
Total operating income for the group jumped 16% to Kes 79.9 billion (3Q2020: 69.1 billion).
Non-Funded Income (NFI) posted a 10% growth.
Loan loss provisions were down 53% at 9.3 billion from the 20 billion posted in 3Q2020.
Gross Non-performing loans (NPLs) were up 1.19% at Kes 98.14 billion.
Shareholders’ equity grew 20% from Kes.136 billion to KShs.163 billion.
KCB Group proposed an interim dividend of Kes 1.00 per share with books set to close on December 9th, 2021. News of the dividend and the robust earnings pushed KCB shares on the bourse by 3.15% week-on-week with the share ending Friday at Kes 45.90 per share from Kes 44.50 posted a week earlier.
Co-operative Bank of Kenya [NSE: COOP]The Co-operative Bank of Kenya continued to post above-average earnings, with an 18.9% jump in net earnings for the period ending 30th September 2021.
Co-op posted an 18.9% growth in profit after tax (PAT) to Kes 11.6 billion.
The bank's total assets grew 16% to Kes 592.9 billion.
Non-Funded Income (NFI) was similarly up 16% to Kes 15.7 billion
Gross non-performing loans grew 23% to Kes 49.5 billion.
Non-funded Income (NFI) was up 16% year-on-year to Kes 15.7 billion.
Earnings per share for the period under review was up 19% to Kes 1.98.
Total Interested income was up 21.5% to Kes 39.5 billion backed by the company's investments in government securities.
Provisions grew 50.3% at Kes 6 billion.
Gross defaults increased 23.1 per cent to Kes49.4 billion
The shares of co-op bank traded on a downward trajectory and ended the week modestly lower at Kes 12.30 per share from the Kes 12.55 the stock had closed at a week earlier.
Alibaba Group Holding Limited [NYSE: BABA]China’s e-commerce giant Alibaba missed fiscal third-quarter earnings estimates on Thursday.
Alibaba’s sales posted a growth of 29% from a year ago, to $31.1 billion and lower than the $32.1 billion analysts estimates.
Alibaba's annual active consumers touched approximate 1.24 billion year on year.
Income from operations jumped 10% to $2.33 billion.
Adjusted EBITA, a nonGAAP measurement, decreased 32% year-over-year to $4.35 billion.
Cloud Computing revenue grew 33% year-over-year to $3.11 billion
Diluted earnings per ADS of $1.74, a 38% year-over-year decrease, missing the consensus estimate of $1.93.
Net cash provided by operating activities was US$5.56 billion.
Alibaba repurchased 26.9 million ADS for about $5.15 billion.
Alibaba’s shares were down on Thursday by over 11% and closed the week at $140.34 per share, a 16.07% drop, week-on-week. The decline in shares was fueled by the company’s decision to update its guidance for the full year. Alibaba now expects revenue to grow between 20% and 23% year-over-year for fiscal 2022.
The Investors Corner (Markets).
U.S Stock markets were mixed for the week most investors looked at economic data, inflation and the current global supply strains.
Also on the watch was the rise in coronavirus infections in some regions across the globe with Austria being the first country to go back into a full lockdown effective today.
The Dow Jones Industrial Average was down 1.4% to close the week at 35,601.98, the S&P 500 gained 0.3% for the week at 4,697.96 and the Nasdaq Composite picked 1.2% during the week to close at 16,057.44 basis points.
Local Markets - The local benchmarks extended their stay on the red. The market-cap-weighted All-share index of the Nairobi Securities Exchange and the NSE25 share index were down during the week, posting a decline of 1.8% and 1.3% to end the week at 168.43 and 3,732.47 basis points respectively. The price-sensitive NSE 20 share index was however similarly on the decline, shedding 1.4% to end the week at 1,893.65 basis points.
What cowries are we collecting this week?
Zoom Telecomunications Inc [NASDAQ: ZM] - Zoom is set to release its earnings after markets close today. The consensus earnings estimate is $1.09 per share on revenue of $1.02 billion. Will zoom live to analysts estimates?
Nairobi Securities Exchange Plc [NSE: NSE] - Day trading on the Nairobi Securities Exchange kicks off today. The same day settlement on the NSE has been a long-awaited one for investors. Volumes over the next few weeks will provide major direction to investors.
Kenya Power & Lighting Company Plc [NSE: KPLC] - Kenya power had last week asked its employees to provide official financial and asset records as part of an ongoing lifestyle audit aimed at curbing fraud at the State-run utility. How will investors react to this news when the market opens today?
How about you, what stocks are you watching for the week? Let us know on the Hisa App.
Disclaimer:Â 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.