Saturday, July 2, 2022

NSE loses Sh. 294 billion in 30 days as foreign investors flee

The Nairobi Securities Exchange (NSE) has lost Sh. 294 billion in the last one month. This follows mass exit from the local bourse by foreign investors.

This mass exit has seen the local market fall to a 20-month low. On Friday May 13, 2022, market capitalisation fell to Sh. 2.176 trillion. This came on the back of a free fall that began on April 13 when the market’s capitalization stood at Sh. 2.471 trillion.

The most affected stocks have included Safaricom, Co-operative Bank, East African Breweries Limited, Equity Bank, and KCB.

Alarmingly, these are the stocks that have been holding the market steady.

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Safaricom accounted for 71.4 percent or Sh. 210 billion of the paper loss. At the same time, KCB Group, Equity Group and Co-operative Bank have dropped by between 22.5 percent and 13.75 percent since mid-February.

This is in spite of the three counters announcing a record Sh. 26.8 billion in dividend payouts.

“It is mostly being driven by global trends, with the higher US interest rates driving high-risk rating for countries like Kenya and lower prices for equities. Even in the Eurobonds we are seeing higher rates,” the Standard Investment Bank (SIB) was quoted by a local newspaper.

“Fundamentally most companies are doing well posting good results and paying dividends. Despite that, foreigners are still selling.”

The NSE has been unable to recover from a bear run that has persisted 2013 when the 20-share index hit highs of 5,000 points.

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