An investor monitors trade at the NSE. The monthly total equity turnover in May was the highest recorded at the bourse at Sh23.5 billion. PHOTO | FILE
What you need to know:
KCB, Safaricom, Equity and EABL attract participation from abroad.
Renewed interest in the big cap counters at the Nairobi Securities Exchange (NSE) has seen foreign inflows return to positive territory after opening the year with three straight months of outflows.
Market data from the NSE for the first seven months of the year shows foreign participation improved starting the second quarter, with analysts saying this has mainly been driven by activity on KCB, Safaricom, Equity and East Africa Breweries Ltd counters.
In the first three months of the year, the market saw capital flight as investors took out a total of Sh2.8 billion at a time when capital was being shifted from emerging and frontier markets into safer advanced markets such as the US.
The subsequent four months have seen a combined net inflow of Sh1.6 billion, with the market as a whole reaping dividend as the 20 Share Index settled above the key 5,000 points mark.
“Cooperative Bank has also increasingly seen interest from foreigners, while DTB has had increased activity, especially during the period of its rights issue. Interest rates which have been largely stable are still expected to decline, pushing more investors to equities,” said Kestrel Capital analyst Kuria Kamau.
Market dealers said at the beginning of the year there was an element of profit taking by investors whose investments had risen in value due to a two-year bull run that saw several counters double their valuations.
The monthly total equity turnover in May was the highest recorded at the bourse at Sh23.5 billion, eclipsing the Sh20.8 billion seen in August last year.
“Going forward company earnings will be key to retaining attractiveness,” said Old Mutual Securities fixed income and equities trader Bedan Kagunda.
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