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Foreigners sell Sh1bn NSE stocks in January
Nairobi Securities Exchange. In January, foreign investors offloaded shares worth Sh1.04 billion from stocks traded on the Nairobi Securities Exchange.
Foreign investors remained net sellers of stocks traded on the Nairobi Securities Exchange in January, extending their exits into the new year.
The investors offloaded shares worth Sh1.04 billion last month on a net outflows basis, furthering the Sh2.3 billion selloffs registered in the whole of 2024.
Net outflows by the investors were largely attributable to capital flows back to their domestic markets on increased interest rates and growth concerns in emerging and frontier economies.
The extension of the foreigners’ exits has continued into the start of the year as markets await the outcome of shocks to global growth, including the implementation of tariffs by the new US administration and President Donald Trump.
Foreign investors remained bearish on NSE listed stocks last year despite the bourse seeing a change in fortunes as the All Share Index rose by 34 percent to 123.48 points.
Analysts however observe that foreign buys in 2024 outpaced purchases in 2023, signalling underlying bullishness for local stocks among the offshore investors.
“Bullish foreigner sentiments more than doubled in the year to register net inflows amounting to Sh44.8 billion delineating the rebound in foreign investor sentiment locally," noted analysts at AIB-AXYs Africa.
"This was further exuberated by the easing of the dollar supply crisis, and the subsequent strengthening of the shilling in the forex market, which allowed foreign investors to repatriate returns more easily.”Â
Foreign buys in 2023 were lower at Sh26.6 billion, trailing sales of Sh39 billion and resulted in net exits of Sh12.4 billion.
The 2024 sales stood at Sh47 billion, resulting in net exits of Sh2.3 billion in the year.
Foreign investors are seen as pivotal to the direction of the NSE despite holding a lower pool of shares in contrast to local institutions and retail clients through their high levels of market participation.
The participation of foreigners nevertheless dropped in December to a 21-month low of 35.49 percent from a higher 62.84 percent at the start of 2024.
The participation of foreigners is expected to recover this year, driven by the strengthening of the shilling and the inclusion of local stocks on global indices.
“Despite a decline of 6.7 percent in foreign participation rate in 2024, we expect that foreign participation will improve going into 2025 which will be majorly attributable to the subsequent strengthening of the shilling coupled with the increase of constituent companies to the MSCI Frontier Markets Small Cap Index that will offer global investment exposure to Kenya’s listed companies,” the AIB-AXYs Africa analysts added.​