Shares of Commercial Banks Set to Decrease

Commercial banks in Kenya that are in the Nairobi Stock Exchange Market, share prices are set to go down courtesy of the interest rate cap.

The Banking sector stocks are bound to remain attractive in the longer term in a combination of below average market valuations and greater projections on margins in subsequent financial year.

“Patrick Mumu, Genghis Capital Equities Analyst, said,” The market might have moved slightly more than expected to news of the interest caps repeal.

This will happen as the banking counter sees off exit from investors who moved to lock in profits from the anticipated appreciation of dividend yield to shareholders from the upcoming profit declarations by banks in the first quarter of the year.

“Commercial banks are expected to reveal higher earnings for the year closing December 31 2019 beginning in February and the subsequent announcement on dividend payouts to shareholders. Once profit taking is concluded the lower levels in stock prices will induce more trading by investors with a long term view,” remarked Mumu.

Equity Bank and Kenya Commercial Bank guided the investor bias towards banking stocks on the bank end of 2019 as the pairs respective share prices bloomed ahead of other notable gains by other banks.