Foreign investor outflows at the Nairobi Securities Exchange (NSE) surged more than four times to Sh12.6 billion in the half-year to June, underlining the impact of their exit in exacerbating the bear market.
The foreigners had pulled out Sh2.9 billion worth of equity investments a year earlier.
The latest outflows are the second-largest after the Sh21.43 billion that was recorded in the first half of 2020, which had been attributed to Covid-19 and poor performance of some companies listed on the bourse.
The monthly outflows hit a peak of Sh4.9 billion in June, capping the exits that have been inspired by the economic fallout from the Russia-Ukraine war and rising interest rates in the developed markets.
Central banks in the United States, Europe, and the United Kingdom are raising interest rates to tame inflation, making the economies more attractive to investors.
The sell-off resulted in paper losses running into hundreds of billions of shillings, with bluechip counters such as Safaricom, KCB, and East African Breweries Plc (EABL) among those that registered double-digit declines in share prices.
The value of all stocks listed on the NSE stood at Sh2.07 trillion yesterday, down from Sh2.63 trillion at the start of the year. This represents a loss of Sh564 billion.
Safaricom, for instance, set a 52-week low of Sh23 on June 27 but has since reversed some of the losses to trade at Sh27.75 on Wednesday.
The telco is the most widely held stock among foreign investors due to its high-profit margins, historical revenue growth, and a large number of shares that provides liquidity.
KCB declined to register a 52-week low of Sh34 on May 5 but closed at Sh41.95 Wednesday.
The recent exit of foreign investors has reduced their participation on the NSE by a large margin, a move that has seen regulators and stock brokers urge domestic investors to boost their investment in equities amid bargains brought by the bear run.
Foreign investors dominated trading on the bourse, accounting for 60 to 70 percent of the equities transactions, but their participation has declined to about 54 percent.