Analysts say the bullish market run could persist beyond the end of the year. FILE
What you need to know:
Nairobi Securities Exchange on course to become Africa’s third best performing bourse.
A strong performance in November kept the Nairobi stock market on course to end the year as the third best performing in Africa behind the Malawi and Ghana bourses.
Comparative data for 18 African stock markets up to the end of November ranks performance of the NSE’s All Share Index (NASI) third with a 49 per cent gain, compared to the Malawi All Share Index’s jump of 105 per cent and Ghana’s GSE All Share Index rise of 77 per cent in the same period.
In November alone the NASI jumped 7.6 per cent to reach 142 points, having stood at 95 points in January.
The NASI tracks changes in share prices of all listed stocks.
Its performance has outstripped that of the NSE 20-Share Index (up 23 per cent) and the NSE FTSE 15 share index (44 per cent), indicating growth has been spread across all the stocks at the bourse.
The ABC Capital manager for corporate finance advisory Johnson Nderi said performance of the NASI is an indication that listed small and medium sized firms have been performing well, in addition to the blue chip counters.
The November data shows that only the Tunisian (TUNIS bourse) and the Moroccan (MORALSI), have recorded negative returns this year, down 2.5 and 0.7 per cent respectively.
Stock market investors have reaped the benefits of this growth in returns, as market capitalisation rose from Sh1.27 trillion at the beginning of the year to Sh1.9 trillion at the end of November.
Equity turnover up to the end of November stood at Sh141.6 billion, extending a record total that is already set to become the NSE’s highest ever annual trade volume.
The full-year equity turnover in 2012 stood at Sh86 billion, and Sh78 billion in 2011.According to market analysts, the bullish market run could persist beyond the end of the year, given the expectation of rising consumer spending, which boosts overall growth.
The prospects for regional growth are also seen as a factor that will help the local bourse, given the presence of listed Kenyan firms in these markets.
“Publically listed Kenyan companies exposure to the greater East African region will also serve as a growth centre for the local equities market in the long term,” says risk and research firm Stratlink Kenya in its December equities market report.
November in particular marked the high point for the bourse this year, with the NSE 20-Share Index breaching the 5,000 points mark and market capitalisation reaching in excess of Sh1.9 trillion.
The market has seen foreign investors target top stocks including Equity Bank, Nation Media Group and East African Breweries Ltd, that recorded net buys worth Sh550 million, Sh274 million and Sh260 million, respectively, from international buyers.
Foreigners exited some counters with the leading ones being Bamburi and Safaricom, with net outflows of Sh439 million and Sh298 million respectively.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
