Subdued trading at NSE after the vote

The share of foreign investors’ participation has declined from 72 per cent in January to 24 per cent last month, according to NSE data.

Their reduced participation has been tied to uncertainty over the referendum and profit-taking after appreciation of the undervalued shares they bought on the low in quarter one.

Analysts say foreign investors are diversifying into other African markets such as Nigeria, hence the decline in their share of the local market.

“Prices of several counters have shot up by 10 per cent to 20 per cent, discouraging foreign investors who usually look for undervalued stocks,” said Mr Mahmoud Hussein, the head of equities trading at Apex Africa Investment Bank, citing the example of Equity Bank’s share price that has appreciated to Sh27, a growth of over 35 per cent in the past three months.

Players see the market remaining on a steady recovery path although there are also expectations that some profit-taking will lead to a dip in share prices in the medium term.

Blue chip stocks with high average daily turnovers such as Safaricom, East Africa Breweries, KCB Bank, Equity Bank, Mumias Sugar and Kenya Airways have remained the investors’ favourite picks.

This has seen foreign trades account for more than 50 per cent of the shares in the quarter ended June.