NSE Index hits 10-month low as market loses Sh39bn
A man monitors online trading at the NSE. The NSE 20 share index shed 101 points during the week. PHOTO | FILE
What you need to know:
The NSE 20 share index fell below the 4900 level on Friday, capping a bad week that saw market capitalisation drop by Sh39.3 billion to stand at Sh2.306 trillion.
Slower earnings and currency depreciation are the main factors in the current slide but analysts say the market should rebound in the medium term.
The NSE slipped to a 10-month low of 4879 points on Friday as stocks continued shedding value with both local and foreign investors selling off.
The benchmark index slipped below the 4900 level for the first time since the end of July 2014, capping a bad week that saw market capitalisation drop by Sh39.3 billion to stand at Sh2.306 trillion.
The main index shed 101 points during the week, or 2.02 per cent while the NSE All Share index was down three points or 1.7 per cent to 164.
Only 16 — mainly small cap — counters recorded price gains during the week, and even so on thin margins, as most large and medium caps closed the week in the red.
“The market headed lower during the session with foreign investors accounting for 66.1 per cent of selling activity... local investors appeared generally bearish,” said Standard Investment Bank in a market report on Friday.
Analysts say the bourse is weighed down by multiple factors. Slower earnings and currency depreciation are the main factors but analysts say the market should rebound in the medium term.
“The market has been in an intermediate bearish phase state the beginning of quarter two.
“This has been attributable to the general slowdown in earnings growth in 2014 across several sectors — services and agriculture being worst hit — while insurance and banking recorded relatively lower earnings growth,” said Genghis Capital analyst Silha Rasugu.
“The downward trend has been accelerated further by intense currency volatility, in April especially, which has spooked foreign investors.”
Pan African Insurance was the week’s top loser, down 19.2 per cent to Sh73.50, followed by I&M bank at 9.7 per cent to Sh121 and Britam at 6.5 per cent to Sh21.50.
On the other end, only two counters registered weekly gains of more than five per cent, with Kapchorua Tea the top gainer at 12 per cent to Sh130 followed by Olympia Capital which closed the week up five per cent up at Sh5.25.
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