Bank share prices up in Kenya as investors eye higher dividends
TLDR
- Tier-one bank stocks at Nairobi Securities Exchange (NSE) gained Sh12.1 billion in market value within one week, driven by investor demand and anticipation of higher dividends.
- Stanbic Holdings recorded a historic 21.8% dividend increase to Sh6.07 billion, sparking positive market response.
- Standard Chartered Bank Kenya saw a significant 32% surge in annual payout to Sh29 per share, setting a record high and boosting stock value.
Tier-one bank stocks at the Nairobi Securities Exchange (NSE) have surged, adding Sh12.1 billion ($83 million) in market value in the one week to March 14. This uptrend comes amid heightened investor demand driven by the anticipation of higher dividends declared by lenders for the fiscal year ending December 2023.
Seven out of the nine lenders witnessed price gains since March 5, notably following Stanbic Holdings' announcement of a 21.8% increase in its dividend to Sh6.07 billion or Sh15.35 per share—the highest payout ever made by the company.
Similarly, Standard Chartered Bank Kenya's disclosure of a 32% surge in its annual payout to Sh29 per share—a record high for the institution—during its recent financial results release, also ignited a buying spree, propelling its stock price upward.
Key Takeaways
Investors are seizing the opportunity presented by the promising dividend outlook from major lenders, driving increased interest in bank stocks overall. By strategically entering the market now, investors aim to secure potentially higher effective dividend yields should banks further boost their payout levels. This surge in demand has propelled the collective market capitalization of tier-one lenders to Sh592.7 billion, marking a notable increase from Sh580.6 billion recorded over the past seven trading sessions. Leading the gains are Standard Chartered (Sh6.5 billion), NCBA (Sh2.7 billion), and KCB Group (Sh1.6 billion). Additionally, Absa Kenya (Sh814.73 million) and Equity Group (Sh566 million) have also seen significant upticks in their market value.
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