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This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
NSE turnover hits Sh1.6bn after capital gains tax war. Average daily turnover has risen to KES 1.16 billion since February 20 compared to KES 567.7 million in the preceding seven weeks when KRA fought a vicious war with brokers over the law requiring them to collect and remit capital gains tax.

Our View: The increased turnover in the NSE for the past weeks is as a result of the government shifting the burden of paying and accounting for capital gains tax to investors at the Nairobi Securities Exchange which will be done through an amendment of the relevant law and will have to wait until the next financial year beginning July to bring the new tax measure into force. The Kenyan market is also benefitting from the shift of allocation of resources from the Nigerian Markets where there is political and security concerns over the general election and heightened insecurity as a result of Boko Haram. Investors are also expecting good financial results as the most banks are announcing their FY 2014 performance.
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