NSE investors lose Sh53b in month of tense share trading

The NSE returned negative returns in 2008 and 2009 because of the weak global and local economies and confidence crisis due to fraud and effects of the 2008 post-election turmoil in Kenya.

“The market is very unpredictable now, but there is a strong bias for flat market in coming weeks,” said Erick Musau, an analyst at African Alliance.

“There is no new information to trigger a rally. The market had factored in the referendum news and corporate profit in late July and early August,” added Mr Musau.

The dim outlook of the NSE has triggered a shift in fund managers’ portfolios as high net worth investors increasingly look at the bond market for returns.

This is explained by the vibrancy in the bond market whose trading stood at Sh361 billion in the eight months to August compared to Sh118 billion in the same period last year.

The debt segment is becoming important for the capital market intermediaries now that the equities market is recording sluggish trading.

“There has been increased investor appetite in the secondary bond market since its offering better yields than the equities and primary bond market,” said an investor brief from Standard Investment Bank.

This business segment is becoming important for the capital market intermediaries now that the equities market is recording sluggish trading.

Retail investors—who had began to show interest on the bourse after keeping off in 2009—have also began to shy away from the NSE as they tend to prefer a speculative market with wild price swings.