Markets & Finance

Investors in NSE-listed firms lose Sh41bn in a week

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The Central Bank of Kenya. PHOTO | FILE

Investors in companies listed at the Nairobi Securities Exchange (NSE) have lost Sh41 billion in just one week, signaling the extent to which the bear market is eroding paper wealth.

NSE market capitalisation, an indicator of the quoted wealth, stood at Sh1.941 trillion last Monday as compared to Sh1.982 trillion on the same day last week.

At the same time, the NSE 20 Share Index remained below the psychologically important mark of 4000 points for the better part of the week. However, it recovered from its sub-3900 level last Wednesday.

With the lower prices, foreigners have been getting back to the market as net buyers since last Thursday.

“With participation at 59.5 per cent, foreign investors were net buyers for the third straight trading session, accounting for 81 per cent of total buys versus 89.8 per cent previously,” said Nairobi-based Standard Investment Bank in a note to clients.

Among the major losers on Monday were Atlas Development and Express Kenya, shedding 6.0 and 5.5 per cent of their values respectively.

The gainers included Car and General, the NSE and Kenya Power with 9.4, 6.7 and 4.6 per cent upward price movement, respectively.

The NSE counter was the leading mover on Monday accounting for 49.4 per cent of market activity.

The persistent bear market has been attributed to various factors including the increasing interest rates that have made primary market fixed-income instruments more attractive, the weak shilling, poor performance and profit warnings by a number of corporate entities.

The fixed-income market, in particular, has hit a point where the 91-day Treasury bill rate is at 21 per cent and a bond was recently sold at 20 per cent. The rates have risen rapidly in the past four months due to the monetary tightening measures by the central bank to cushion the local currency.