An investor monitors the electronic board at the Nairobi Securities Exchange. Only Egypt’s stock market outperformed the Kenyan bourse over the one-year period. FILE
What you need to know:
Cumulative 12-month gains for the NSE All Share Index stand at 29 per cent, outperforming peer bourses like Nigeria, Morocco, Zimbabwe and Tunisia.
Only Egypt’s stock market has outperformed the Kenyan bourse over the one-year period.
NSE’s year-on-year returns to investors are among the highest in Africa despite the slide that has seen the bourse’s All Share Index drop to its year-opening level.
Cumulative 12-month gains for the Nairobi Securities Exchange (NSE) All Share Index stand at 29 per cent, outperforming peer bourses like Nigeria, Morocco, Zimbabwe and Tunisia. Only Egypt’s stock market has outperformed the Kenyan bourse over the one-year period.
The five bourses plus Kenya are considered to be peers ranked in the second tier of African stock markets, with South Africa the sole first tier exchange on the continent.
Data from the Africa Alliance Weekly Report and the respective bourses shows that Egypt’s EGX100 Index has gained 35 per cent since February 2013.
Nigeria’s All Share Index is second with a gain of 17 per cent with Zimbabwe’s industrial (All Share) index up 4.7 per cent, Morocco’s All Share Index (Casablanca MORALSI) up four per cent and Tunisia’s TUNIS index up 0.3 per cent over the period.
Emerging and frontier markets have been under pressure in the past month following the start of the US Federal Reserve Quantitative Easing taper, but analysts see the stronger fundamentals of the Kenyan market as key in keeping its performance ahead of regional peers.
“Even though the taper has begun, the Kenyan market has been supported by stronger fundamentals such as the government investments we are seeing in infrastructure. In Sub Saharan Africa, Kenya and Nigeria, in addition to South Africa, get the biggest foreign interest,” said Kestrel Capital research analyst Kuria Kamau.
He added that the expectation of improved earnings by companies has also kept interest and demand in the Kenyan market high.
NSE data shows that foreign investors recorded a second straight month of net selling in January 2014, with outflows of Sh876 million. This followed net outflows of Sh690 million in December 2013.
Year-to-date data, which measures performance since January, however shows that the sub-Sahara African markets have been under more pressure than their North African peers.
The NSE All Share Index remains flat this year at 136 points, while the Nigerian ALSI is down 4.72 per cent and the Zimbabwe bourse down 6.2 per cent.
On the other hand, Egypt’s index is up 12 per cent, the Tunisian market up six per cent and the Morocco one up 0.26 per cent. Of the lower tier bourses, the Ghana All Share Index remains a top performer, with year-to-date gains of 13 per cent.
Measured through the All Share Index, the NSE ended 2013 as the third best performing bourse on the continent, when considering comparative data of 18 continental bourses. The NASI gained 43 per cent last year.
Its performance outstripped that of the NSE 20-Share Index (up 19 per cent), showing that the gains were more evenly spread across the bourse rather than only in the top counters.
“Investors continue to accumulate undervalued and often over-looked mid and small cap counters, more so in the insurance sector which has been tipped to register comparatively better earnings for the 2014 financial year,” said Genghis Capital in a market note released on Wednesday.
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