According to Reuters, Kenyan shares rose to hit a 7-month high on Thursday lifted by a return of institutional investors in the market. Institutional investors are non organizations that trade securities in large enough quantities that they qualify for preferential treatment and lower commissions. Examples could include Pension funds such as the National Social Security Fund (NSSF).

The shilling, on the other hand, has consistently traded within decent ranges against the dollar.

Kenyan stocks are up 8.9% this year, recovering from a 33% slump in 2011, improved investor confidence due to a hospitable economic environment evidenced by a falling inflation rate, lower yields in the debt market and a stable shilling. Yesterday, the NSE-20 Share Index rose 1.3% to 3534.27 points, this is the highest the index has reached since November 2011, when it attained 3,536.25 points.

This year we expect to observe high investor activity at the NSE as a number of listed banks, including NIC Bank, Diamond Trust Bank and Standard Chartered Bank, are scheduled to float right issues this year. These would follow the pace set by Kenya Airways’ ongoing rights issue.

On Tuesday, the Central Bank of Kenya advertised a two year Treasury bond worth KES 5 billion to be auctioned on the 25^th of April 2012. In light of this capital flows into the country are anticipated as foreign investors are expected to bid for this bond. Government securities have had attractive yields and will keep attracting investors.

Next week investors should be keen to observe the following:

• The effect of the announcement of Standard Chartered rights issue will have on the share price.
• The aftermath of the Kenya Airways rights issue on the share and on the market as a whole.
• The subscription rate for the new two year bond, the weighted average yield it will return and the effect of the bond on prevailing interest rates.