Kenya Commercial Bank Ltd. (KNCB), the country’s biggest lender by assets, dropped the most in almost eight months on a technical signal that suggested a rally this year was overdone.
KCB, as the lender is known, fell 5.1 percent to close at 32.75 shillings a share in the capital, Nairobi, its biggest retreat since May 22.
The stock had climbed 16 percent this year before today, closing at a record high of 34.5 shillings yesterday, leaving its 14-day relative strength index at 91.7, according to data compiled by Bloomberg. A reading above 70 means a security is overvalued and will probably fall. KCB’s RSI was above 70 every day this year until today, where it last stood at 65.5.
“Guys are taking profits after the shares gained so much,” Faith Atiti, a research analyst at Nairobi-based NIC Securities Ltd. said by telephone. “The market was expecting the correction after the rally.”
The lender’s earnings in the nine months through September surged 35 percent to 8.69 billion shillings ($100 million) as income from loans grew, it said Oct. 25.
To contact the reporter on this story: Eric Ombok in Nairobi at email@example.com
To contact the editor responsible for this story: Shaji Mathew at firstname.lastname@example.org