Capital Markets

Nairobi bourse tops Africa stock market ranking


A trader at the NSE. The exchange closed the year as the top performing African market on the global MSCI Index. FILE

The Nairobi Securities Exchange (NSE) closed the year as the top performing African market on the global MSCI Index, putting Kenya on the radar of international investors who have appetite for risk exposure in frontier markets.

The MSCI Indices 2013 Performance Results ranked the NSE as the fourth best performing stock market in the world, with a 43.58 per cent return.

Bulgaria was the best performing market with a 91.55 per cent return, followed by UAE (79.02 per cent), Argentina (68.97 per cent). Pakistan was fifth with a 27.76 per cent return.

“Frontier Markets Africa Index was the top performing regional FM index, delivering a return of 23.49 per cent for the period,” said MSCI in its end of year report.

Globally, gains from the NSE were also higher than the MSCI Frontier Markets (FM) Index which had a 20.53 per cent return.

On average, returns from 8,500 large and small companies in emerging, developed and frontier markets had a 19.58 per cent return in 2013, an increase from 2012’s 13.7 per cent returns.

The lowest performing frontier markets were Tunisia and Ukraine which had returns of -12.44 per cent and 18.52 per cent respectively.

Kenya’s returns are also higher when benchmarked against the NSE-20 Share Index, the main parameter used to track investor gains at the Nairobi bourse.

READ: Stock market earns investors highest returns in 2013

Comparative data from the bourse shows that before Christmas the NSE-20 Share Index had gained 18 per cent from the beginning of the year to 4,886.52 points from 4,140.43 points it opened with on the first day of trading this year.

Despite Kenya being among the best performing global stock markets, the fourth place rank in 2013 is a drop from the pole position it was placed in the 2012 charts when the index recorded a 54.16 per cent return.

The MSCI Kenya Index was top on the frontier markets class in 2012.

Analysts said that they expect that both local and foreign investors would continue to trade at the NSE, which should fuel the bourse’s momentum in 2014.

“Investors began accumulating on prospective counters ahead of the new year thus we anticipate gradual resurgence of equity turnover and share prices in the mid-term as the festive period draws to a close and economic outlook for 2014 remains positive,” said a weekly market report by Genghis Capital.

Activity picked up from the second half of the year following a peaceful conclusion to the General Election.

Foreign investors in particular have been strong on financial counters and other blue chip stocks.