Uncover the Secrets of the Market: Stay Ahead of the Game with IZ Weekly Newsletter

Are you looking to stay ahead of the financial game? Look no further! This week’s financial news has been making waves for both local and foreign investors. Our top story covers the Treasury’s efforts to increase revenue and combat tax evasion by tracking Mpesa transactions. Stay informed with a detailed summary of the latest market happenings and don’t miss out on our IZ Weekly Stock Picks, featuring the top 5 stocks to watch in the coming days. Keep your portfolio in tip-top shape with the inside scoop only we can provide.

Your Mpesa transactions will start being tracked.

With a new government in place, the tax collector has set an ambitious goal of 2.8 trillion in revenue collection for the upcoming financial year. To achieve this, the treasury has hinted at its plans to integrate KRA tax systems with electronic money transfer providers like Mpesa to monitor mobile money transactions in the informal sector, curbing tax evasion and increase revenue.

This is not a new measure, similar steps have been taken in the US, as of January 1st, mobile payment apps like Paypal, Venmo are required to report any commercial transactions exceeding $600 in a year. Previously the threshold was $20,000 and transactions were only required to be reported if they exceeded 200. Be aware and stay informed of the latest tax regulations and measures to ensure you stay on the right side of the law and avoid any unpleasant surprises.

Time to get Paid in Dollars as Shilling hits Record Low of 124

The Kenyan shilling has been going through a difficult period, experiencing a significant decline in value against the USD. Over the course of 2022, the shilling shed 10% of its value, closing the year at 123.42. Unfortunately, the trend has continued and the shilling hit a new record low of 124 on Monday 16th. According to the International Monetary Fund (IMF), Kenya is currently facing challenging economic conditions, with high demand for foreign currency and reduced demand for the Kenyan shilling, leading to its depreciation.

The depreciation of the shilling means that it will cost more to import goods into the country, and given that Kenya imports a large portion of its consumer goods including petroleum products, machinery, medicine, clothing, etc, we may see a rise in the cost of living in the coming days. To ensure that you are on the safe side, it may be wise to have savings in USD or invest in dollar-based assets such as offshore stocks, commodities, futures, and crypto.

In addition to the shilling’s depreciation, De La Rue, Kenya’s contracted banknote printer, announced that it will be suspending operations in Kenya due to low market demand for the next 12 months.

Centum Puts Aside Sell of it’s Sidian Bank Shares to A Nigerian Bank

Centum has decided to hold onto its shares of Sidian Bank, citing that the potential buyer, Access Bank PLC of Nigeria, did not meet certain conditions. As the majority shareholder with 83.4% of Sidian Bank’s shares, this decision will have a significant impact on the bank’s future.

This news comes at a time when Centum’s shares have been struggling, losing 50% of their value in the last year. The company launched a share buyback program last year in an attempt to boost share prices, but it did not have the desired effect.

The Safaricom Frenzy

Safaricom shares, like many others on the Nairobi Securities Exchange (NSE), have been experiencing a decline since July 2021, after reaching record highs of sh. 44. Recently, the decline has accelerated, with the shares dropping from sh 24 to sh 20, driven by fear, uncertainty, and doubt (FUD) among investors. Some of the contributing factors include the exit of big foreign shareholders and concerns about the potential impact of Starlink’s establishment in Kenya on Safaricom’s dominance in the market and financial performance. Additionally, the ongoing Ethiopian war is also having a direct effect on its newly established Safaricom Ethiopia PLC.

Despite these challenges, we highly encourage investors to take a closer look at the fundamentals of the company. Safaricom has a strong track record and its underlying financials remain strong. It is important to remember that news and market fluctuations can cause short-term dips in stock prices, but these do not necessarily reflect the long-term potential of the company. We believe that now is a great opportunity for investors to buy Safaricom shares and hold onto them for the long term.

IZ Weekly Stock Picks

This week, we have compiled a list of the top 5 shares to watch in the coming days. These stocks have been carefully selected based on their potential for growth and returns.

1. Safaricom: Trading at 22.50, we believe this is a strong buy opportunity. Our experts recommend buying this stock and looking for an exit point at Sh 35, which would represent an approximate 60% capital gain.
2. Umeme: Known for its consistent dividends payout and capital gains, this stock is a great choice for long-term investors who are looking for higher returns from dividends and capital gains.
3. NCBA: This is a reliable dividend payer, but we believe that in the short-term, the stock may pull back to below Sh 30 before seeing another significant rise. For dividend investors, we advise holding this stock, but for those focused on capital gains, it may be a good idea to sell and catch it at a lower price below Sh 30.
4. COOP & ABSA: These two companies have a proven track record of paying dividends consistently. Additionally, with the resumption of bank to mobile transactions, we expect to see growth in their revenues, which will increase the dividends paid and drive up the demand for their shares. Therefore, we believe these stocks are a hold opportunity.

In conclusion, we hope you find these stock recommendations useful in your investment decisions. As always, it’s important to do your own research and consider your own investment goals and risk tolerance before making any investment decisions.