*Today’s News Highlights* ▪ *Speculators drive up stocks of small firms* The number of small cap stocks at the Nairobi Securities Exchange (NSE) with outsized price gains has gone up this year as speculative trading takes hold in the market, despite the risk of losses on firms with weak fundamentals. NSE market data shows that in the first five weeks of this year, TransCentury leads the market with a gain of 282 percent to Sh1.49 per share, followed by Home Afrika at 157 percent to Sh0.95, East Africa Cables at 148 percent to trade at Sh2.68, and Flame Tree Group by 110 percent to Sh2.10 per share. ▪ *Banks post Sh262bn pre-tax profit on expensive loans* Commercial banks set a new record pre-tax profit of Sh262.3 billion in 2024, buoyed by high lending rates and income from government securities, new disclosures by the Central Bank of Kenya (CBK) show. The performance signals a bigger headroom for banks to reward their shareholders with enhanced dividend payouts. Banks rode the wave of the rising interest rate environment to adjust lending rates upwards, while increasing their return from packing funds in government securities including Treasury bills and bonds. Interest charged on bank loans topped 25 percent last year when interest on Treasury bills topped the 16 percent mark. ▪ *Safaricom-Ethiopia M-Pesa customers triple to 10.8 million* The number of M-Pesa customers in Safaricom’s Ethiopia subsidiary more than tripled from 3.1 million to 10.8 million in the 12 months to December 2024, backed by increased usage of the platform for airtime and data purchases, and the introduction of cross-border cash transfer services. Safaricom Telecommunications Ethiopia started offering M-Pesa service in August 2023, 10 months after it launched voice and data segments in the country. Unlike Kenya, where cash transfers and merchant payments form the bulk of M-Pesa transactions, Ethiopia has seen data and airtime purchases top the list of most used services on the platform. ▪ *Housing levy defaulters face accounts, PIN freezes* Traders in the informal sector who fail to pay the monthly 1.5 percent housing levy risk having their bank accounts frozen and their PINs blocked in a new push to boost compliance. The Kenya Revenue Authority (KRA) is expected to launch a crackdown on defaulters, notably in the informal sector where traders are not paying the levy and businesses such as bars, salons and corner shops are not remitting deductions from their staff pay. ▪ *US firm eyes Sh129bn locally for Expressway* US infrastructure investment firm, Everstrong Capital, will raise Sh129 billion from the local market for the construction of the 440-kilometre Nairobi-Mombasa Highway, as it targets to break ground by the end of the year. The company yesterday signed an agreement to spearhead fundraising of $1 billion(Sh129.2billion) from local banks and pension funds, marking a key step in the development of Usahihi Expressway, the key road that is expected to cut the trip between the capital and the coastal city down to 4.5 hours. _Courtesy: Business Daily_ https://whatsapp.com/channel/0029VaBcBIRAzNbtD1l1eA1k