KCB headquarters at KenCom House in Nairobi. KCB was the top performing stock in the NSE FTSE 15 and FTSE 25 indices. Photo/SALATON NJAU
What you need to know:
End-year data compiled by FTSE Group, the international index and data provider, shows that its NSE FTSE 15 and FTSE 25 indices outperformed other emerging market indices provided by the firm during their first full-year since their launch in November 2011.
Political uncertainties could however affect performance of the NSE this year as the country goes through the General Election.
The Nairobi Securities Exchange (NSE) is set to remain a strong magnet for international investors this year following its chart-topping performance in 2012, global indices tracker FTSE has predicted.
End-year data compiled by FTSE Group, the international index and data provider, shows that its NSE FTSE 15 and FTSE 25 indices outperformed other emerging market indices provided by the firm during their first full-year since their launch in November 2011.
Foreign investors made net purchases worth Sh21.73 billion at the NSE last year, defying previous trends where they have been net sellers in general election years.
“Interestingly both the FTSE NSE Kenya 15 Index and the FTSE NSE Kenya 25 Index had a superior performance to the FTSE ASEA Pan Africa Index (excluding South Africa) and the FTSE All-World Index series.
"Such performance will only continue to highlight the investment opportunity of Kenya to investors globally,” said Jonathan Cooper, the FTSE Group managing director for Middle East and Africa.
The performance of the two Nairobi FTSE indices tracks closely that of the MSCI Kenya Index, which is provided by another London-based global indices and data provider.
“The top three single country Frontier Markets index performers for 2012 year-to-date included the MSCI Kenya, Nigeria and Estonia Indices which posted returns of 54.16 per cent, 52.82 per cent, and 44.98 per cent, respectively,” said MSCI in a statement that captured last year’s performance.
In terms of capital gains, the value of FTSE 15 and FTSE 25 Index went up by 39.25 and 38.66 per cent respectively last year exceeding the performance of the FTSE All World Index, FTSE Emerging Index and the FTSE ASEA Pan Africa Index which went up by 13.82, 14.16 and 17.24 per cent respectively.
The total return of the two indices, which includes dividends and other corporate actions in addition to capital gains, was 46.59 and 45.86 per cent while the total return of the other three indices stood at 17.14, 17.94 and 23 per cent respectively.
The performance of the two indices which track stocks in Nairobi also exceeded the performance of its five best performing indices within FTSE’s All-World Index Series some of which track stocks in Europe and Asia Pacific, which returned between 20 and 21 per cent.
Vimal Parmar, head of research at Burbidge Capital said that last year’s NSE performance was helped by declining interest rates, a stable currency, falling inflation and favourable weather. He predicted that the equities market may continue to perform well this year if these factors hold.
Political uncertainties could however affect performance of the NSE this year as the country goes through the General Election, which is less than two months away.
The top four performing stocks in the FTSE 15 and FTSE 25 Index were KCB Group, Safaricom, EABL and Equity Bank in that order with total returns of 78.47, 66.67, 51.53 and 44.38 per cent respectively.
KenolKobil was the fifth best performer with a total return of 36.36 per cent in the FTSE 15 index while in the FTSE 25 index; Kenya Re took the fifth position with a total return of 43.33 per cent.
Data from the NSE indicates that between January and December last year, foreign investors made purchases worth Sh54.33 billion compared to sales worth Sh32.59 billion.
In 2011 foreign investors made purchases worth Sh39.49 and sold shares worth Sh39.27 meaning they were net purchasers by Sh220 million and in 2010 the made purchases worth Sh15.72 billion and sales worth Sh7.39 billion meaning they pumped in Sh8.32 billion.
