By Daniel Wesonga

Kenyan equities remained stable but vulnerable to further declines, with the NSE 20-share index ending Monday’s session down 0.13%. Gains in blue-chip stocks, particularly in the financial and communications sectors, provided some support, with Safaricom Ltd rising 1.45%, Equity Group Holdings up 2.06%, KCB Group Ltd gaining 1.99%, and Standard Chartered Bank – Kenya increasing 0.72%. However, declines in East African Breweries Plc (-2.78%), The Co-Operative Bank of Kenya Ltd (-1.80%), and NCBA Group (-1.63%) weighed on sentiment, reflecting concerns over consumer demand. The financial sector’s 0.72% gain offset weakness in distribution services (-2.74%), non-energy minerals (-2.28%), and retail trade (-6.57%), though market conditions remain mixed.

Market focus now shifts to the Central Bank of Kenya’s rate decision on Wednesday, which could impact equity market sentiment. The recent 75 bps rate cut to 11.25% has added liquidity to equities, supporting optimism. However, concerns about currency stability could dampen sentiment. If inflation stays under control, financials and consumer sectors may benefit from the added liquidity. Still, if economic weakness persists, any gains could be limited in the short term.

Wesonga is Senior Sales Manager at Pepperstone