Money Markets

Heavy foreign demand for key stocks boosts market

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The Nairobi Securities Exchange. Brokers handling foreign deals saw their market share rise last year. Photo/File

The Nairobi Securities Exchange. Foreign trading activity accounted for 60 per cent of Wednesday’s turnover. Photo/File  Nation Media Group

By John Gachiri

Posted  Wednesday, January 30  2013 at  19:39

Trading at the Nairobi Securities Exchange (NSE) edged up slightly with 32 million shares worth Sh433 million changing hands up from Sh304 million recorded on Tuesday.

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Market players said that the increase is the result of heavy foreign demand on key stocks such as KCB, Safaricom and Athi River Mining.

Foreign trading activity accounted for 60 per cent of Wednesday’s turnover, in a show of indifference to ongoing campaigns for the March 4 General Election.

The NSE 20 Share Index was marginally up by 9.86 points or 0.22 per cent to close at 4412.61 points. Analysts said they expect the index to trade at this level for some time to come.

“We expected this early in the week target now is 4,450 points,” said Moses Waireri a research analyst at Genghis Capital.

Increased activity is being driven by speculation of strong profits by listed companies when 2012 results start trickling in. Some stocks have, however, begun to cool off.

KenGen continued to gradually lose ground after a mini rally saw the share price hit an all year high of Sh14.20. The share price dropped to Sh12.15, a 2.8 per cent drop from Sh12.50 as investors cash in on gains made in the mini rally.

Analysts said they are also waiting for official inflation numbers showing whether the cost of living has gone up or down.

“Pump prices came down last week and this might lead to a slight reduction on fuel index though... inflation might slightly go up,” said a market report by Old Mutual Securities.