This capped the bourse's strongest week since February.
by VICTOR AMADALA
Audio By Vocalize
Absa Bank Kenya branch
ABSA Bank Kenya emerged among the top performers at the Nairobi Securities Exchange during the week ended June 19 after investors responded positively to a proposed buyout by its South African parent company.
This capped the bourse's strongest week since February.
The lender's shares gained momentum after Absa Group announced plans to acquire up to 895.99 million additional ordinary shares in Absa Bank Kenya Plc.
If successful, the transaction will increase the group's ownership from 68.5 per cent to as much as 85 per cent.
The parent company said the move is aimed at narrowing the gap between the full consolidated risk it already carries on the Kenyan subsidiary and the share of earnings it currently receives.
The offer price of Sh34.50 per share represents a significant premium over the bank's recent trading levels.
It is 20 per cent above the 30-day volume-weighted average price, 18.9 per cent higher than the 90-day average, 28.2 per cent above the 180-day average and 18.1 per cent above the June 17 closing volume-weighted average price.
The announcement sparked renewed investor interest, sending Absa Bank Kenya shares to an all-time high of Sh33 on June 18 before settling at Sh30.75 at the close of trading on Friday.
The excitement around Absa added to an already bullish mood at the NSE, where investors pushed four of the exchange's five major indices to either record or multi-month highs.
Five listed companies also reached all-time highs during Friday's session, underlining the breadth of the market rally.
The benchmark NSE 25 Share Index closed at a record 6,049.51 points, marking an impressive recovery from its November 2023 low of 2,216.
The index has now gained 18.7 per cent since the beginning of the year, reflecting growing investor confidence in Kenyan equities.
The rally has been supported by gains across most blue-chip counters.
At least 19 out of 25 companies in the NSE 25 Index are trading higher this year, led by Stanbic Holdings, which has risen 46.14 per cent, followed by I&M Holdings at 45.47 per cent and Co-operative Bank at 39.04 per cent.
Only KenGen, Centum Investment, NSE Plc, HFCB Group, CIC Insurance and Liberty Kenya remain in negative territory for the year.
The upbeat mood in the capital markets was mirrored in the government's debt market, where investors continued to show strong appetite for Treasury securities despite a slight increase in interest rates.
The Treasury Bill auction held on June 18 attracted bids worth Sh49 billion against the advertised Sh24 billion, translating to a subscription rate of 204.1 per cent.
Yields on the 91-day, 182-day and 364-day Treasury Bills edged up marginally, indicating investors are still seeking higher returns while remaining confident in government paper.
Demand was equally robust at the Treasury bond auction conducted on June 17.
The reopened 20-year and 25-year Treasury bonds received bids worth Sh77.6 billion against the government's target of Sh60 billion, representing a subscription rate of 129.4 per cent.
The strong response to both equity and fixed-income markets reflects sustained investor confidence, with market participants continuing to position themselves for attractive returns as Kenya's capital markets maintain their upward momentum.
This is premium content
Subscribe to Continue Reading
Help us continue bringing you unbiased news, in-depth investigations, and diverse perspectives. Your subscription keeps our mission alive and empowers us to provide high-quality, trustworthy journalism. Join us today to make a difference!
