Market data compiled by several stockbrokers shows that the average foreign participation level in equity turnover has fallen to 55.6 per cent in the last eight weeks, much lower than the 2017 average of 65.2 per cent.
The return of local investors to the market has coincided with an upturn in share prices at the exchange, which is showing signs of turning around from the bear run which set off in March 2015.
Foreigners have taken a selling stance during the past two months, indicating that the locals are once again accumulating shares after seeing prices recover, having kept off during the bear run.
Local investors have clawed back their share of traded turnover at the Nairobi Securities Exchange #ticker:NSE in recent weeks, bucking a long trend that had seen foreigners account for the bulk of activity at the exchange.
Market data compiled by several stockbrokers shows that the average foreign participation level in equity turnover has fallen to 55.6 per cent in the last eight weeks, much lower than the 2017 average of 65.2 per cent.
The return of local investors to the market has coincided with an upturn in share prices at the exchange, which is showing signs of turning around from the bear run which set off in March 2015.
“For the seventh week in a row, foreign investors were net sellers recording net outflows of $7.7 million (Sh796 million). Overall, foreign investor participation was 56.2 per cent during the week, lower than 2017’s average of 65.2 per cent,” said Standard Investment Bank (SIB) in its latest weekly markets summary.
Foreigners have taken a selling stance during the past two months, indicating that the locals are once again accumulating shares after seeing prices recover, having kept off during the bear run.
The NSE’s benchmark NSE 20 share index is 25.3 per cent up since the beginning of the year, while the NSE All share index is up by 23.9 per cent over the period. Last year, the 20 share index shed 21 per cent, while the All share index closed 2016 eight per cent down.
In 2016, foreign investors on average accounted for more than 70 per cent of total equity turnover, peaking at 83 per cent in September.
These investors mainly restrict themselves to trading in the large blue chip stocks such as Safaricom #ticker:SCOM , EABL #ticker:EABL , KCB #ticker:KCB and Equity Bank #ticker:EQTY , which can offer sufficient liquidity and volumes to sustain large deals.
These large caps have been among the better performing stocks in the past two months—Safaricom is currently trading at an all-time high of Sh24.75-Sh25.00— leading to some profit taking among investors.
