Capital Markets

SIB’s offshore unit posts 18.7pc return on Wallstreet rally

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Nairobi Securities Exchange. FILE PHOTO | NMG

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Summary

  • In a brief to investors and filed with the Capital Market Authority (CMA), SIB says its returns beat the Nairobi bourse index, which posted negative 29.6 percent return, as foreign investors fled the equities markets across the globe.
  • The performance came on the back of gains from trading on crude oil, gold and the US stock markets, which witnessed a resurgence fueled by the largest federal government stimulus ever

Standard Investment Bank (SIB) forex and commodities trading platform shrugged off effects of Covid-19 to post a net investors return of 18.75 percent last year on Wall Street’s resurgence.

In a brief to investors and filed with the Capital Market Authority (CMA), SIB says its returns beat the Nairobi bourse index, which posted negative 29.6 percent return, as foreign investors fled the equities markets across the globe.

The performance came on the back of gains from trading on crude oil, gold and the US stock markets, which witnessed a resurgence fueled by the largest federal government stimulus ever

“Our performance benefited from the massive growth in the US stock market. Our commodities segment made good returns from rising gold and crude prices,” Nahashon Mungai, head of global markets at SIB.

A rally in US stocks, crude and gold offered SIB opportunities to make capital gains after selling the investments at higher prices.

The US stock market ended 2020 at all-time highs, capping off a soaring comeback despite a deadly pandemic that left millions jobless.

The S&P 500-stock index, the most widely watched gauge, finished the year up more than 16 percent.

The Dow Jones industrial average and the tech-heavy Nasdaq gained 7.25 percent and 43.6 percent, respectively.

Wall Street’s resurgence has been fueled by the historic support from the Federal Reserve and optimism about how quickly the economy is likely to bounce back this year as coronavirus vaccines become widely distributed.

Gold prices closed the year 24 percent up while for the year while crude oil rose 240 percent between April and December.

CMA granted SIB the first money manager licence, which allows the firm to invest offshore in forex and commodities on behalf of clients in its product dubbed Mansa X, which closed the year with Sh3.1 billion investors’ funds, up from Sh300 million in December 2019.

“The final quarter of 2020 was about steering the fund to maintain the outstanding numbers we had delivered in the course of the year,” Mr Mungai added.