Staff at the Nairobi securities Exchange. FILE PHOTO | NMG
What you need to know:
NSE data shows that bonds turnover in the six months to June stood at Sh237.4 billion, which was Sh29.8 billion less than the Sh267.2 billion traded in the first six months of 2016.
In contrast with bonds, the turnover in the equities market went up in the six months to June, coming in at Sh82 billion compared to Sh73.6 billion in first half last year.
This increase in trading, especially in the second quarter of the year, coincided with an improvement in share prices across key sectors such as banking, services and manufacturing.
Bond turnover at the Nairobi Securities Exchange #ticker:NSE fell 11 per cent in the first half of the year compared to a similar period last year after investors pumped capital in primary security issues and equities.
NSE data shows that bonds turnover in the six months to June stood at Sh237.4 billion, which was Sh29.8 billion less than the Sh267.2 billion traded in the first six months of 2016.
At the same time, the primary Treasury bill auctions attracted subscription of 263.2 per cent in the six months.
“Despite more interest in the bond market most investors have preferred the primary market over the secondary due to the risk involved with the secondary market, especially where you are working with much more expensive money (due to the floor on deposits at seven per cent),” said Genghis Capital head of fixed income Kenneth Minjire.
“There have (also) been less foreign investors investing in the bond market with most of the activity this year from them being on the sale side.”
The government’s appetite for new domestic debt is expected to remain strong in the current fiscal year due to a large budget deficit of Sh524 billion, meaning that the trend of preference by investors for new securities may persist.
In contrast with bonds, the turnover in the equities market went up in the six months to June, coming in at Sh82 billion compared to Sh73.6 billion in first half last year.
This increase in trading, especially in the second quarter of the year, coincided with an improvement in share prices across key sectors such as banking, services and manufacturing.
“After struggling in the first quarter, the Kenyan equities market recovered in the second quarter as a result of gains in prices of large cap bank stocks such as #ticker:DTBK, #ticker:KCB Group, #ticker:COOP Cooperative and Equity Group…,’’ said Cytonn Investments’ half-year market report.
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Note: The results are not exact but very close to the actual.
