The rebound since end of June has seen total value of shares listed at the NSE surge to Sh1.74 trillion, nine per cent above the June 27 level of Sh1.60 trillion.
The resurgence has also lifted the bourse above the end of May market capitalisation level of Sh1.72 trillion.
The big two counters in terms of market capitalisation; Safaricom and East Africa Breweries, have recorded big gains in their total valuation.
Investor wealth at the stock market has soared by Sh140 billion in the past three weeks, setting the Nairobi Securities Exchange (NSE) on course to touching the Sh1.8 trillion market capitalisation mark.
The rebound since end of June has seen total value of shares listed at the NSE surge to Sh1.74 trillion, nine per cent above the June 27 level of Sh1.60 trillion.
The resurgence has also lifted the bourse above the end of May market capitalisation level of Sh1.72 trillion, marking a complete recovery from the dip in June that had wiped off Sh100 billion in investor wealth.
“The market seems to have regained its vibrancy on anticipation of half-year numbers. We expect investors to remain active in the coming week,” said stockbrokerage firm Sterling Capital in a market report ahead of this week’s trading.
The big two counters in terms of market capitalisation; Safaricom and East Africa Breweries, have recorded big gains in their total valuation. The gains on the two counters has also been helped by Safaricom’s large float of shares and EABL’s high nominal prices.
Safaricom which has seen its share price rise from Sh6.50 to Sh7.35 since the beginning of July has earned shareholders Sh34 billion in capital gains surging to Sh294 billion, while EABL’s share has gone up from Sh320 to Sh344 in the same period to see its valuation rise by Sh19 billion to Sh272 billion.
“The big cap counters movement upwards in share price has driven the value of the market upwards,” said ABC Capital general manager Samwel Kiraka.
Kestrel Capital singled out increased demand for banking stocks as another factor driving the market, with the sector having accounted 36.4 per cent of the turnover last week.
KCB has seen its market value appreciate by Sh12 billion since the end of June.
Equity bank’s market capitalisation has gone up by Sh8.5 billion, that of Barclays has risen by Sh11.4 billion and StanChart is up by Sh5.6 billion in the same duration.
The value of the NSE has also been boosted by the listing of Home Africa on the Growth and Enterprise Market Segment, bringing an additional value of Sh9.1 billion to the bourse.
The increase in the market cap without a corresponding rise in the NSE 20-Share Index shows that the increase in share prices is evenly spread over the 54 stocks and not just on the constituent companies of the index, said Standard Investment Bank analyst Eric Musau.
Compared to the end of May, when the capitalisation stood at Sh1.71 trillion against the NSE 20-Share Index valuation of 5,006 points, the July market cap of Sh1.74 trillion comes when the index stands at 4,778 points.
Investor wealth at the bourse has experienced sharp shifts in the past three months, gaining Sh118 billion in May before losing Sh100 billion in June.
In May, the 5.05 per cent rise in value was as the result of a bullish run that analysts said was spurred by falling interest rates on Treasury securities, with investor confidence solid following the peaceful conclusion of the General Election and the petitions that followed.
From May 1 to May 30, the three largest companies at the NSE saw their value rise by a combined Sh88 billion, while several counters hit their one-year highs during this period.
June, however, saw a turnaround in fortunes for investors at the bourse, as their wealth retreated by Sh100 billion in the last two weeks of the month on concerns over the threat of capital gains tax.
