Kenyans prop up bourse as foreign interest wanes

High returns

In the last five years the NSE, one of the largest bourses in Africa, has posted high returns compared to developed markets, attracting the interest of international investors.

In 2008, the Safaricom IPO that had a special reserve allocation for international investors heralded the participation of foreign investors at the NSE who brought in over Sh39 billion or 40 per cent of total market turnover then.

This figure was more than double what was witnessed in 2007 where foreign investors’ turnover stood at Sh16.7 billion accounting for 18.8 per cent of market total, and a climb from the 2006 level of 10 per cent.

Foreign investors are capped at 75 per cent ownership in any listed firm.

Analysts say data on foreign investors in Kenya is debatable as some of the foreign entities are owned by local investors.

“The definition of who is considered as a foreign investor is still not clear in our market,” said Alex Muiruri, an independent market analyst.

The NSE 20 share index has risen 31.17 per cent in the first five months of 2010 to June 11, while capitalisation increased from Sh831 billion at close of 2009 to Sh1.1 trillion as at June 24