Money flowing out of the Nairobi Securities Exchange (NSE) is getting uncomfortably hot. Equities have suffered a loss of foreign investor interest since the start of 2020. They’ve been fleeing the market on the back of mainly depreciating currency value - year to date, the Kenyan Shilling has depreciated by 22.9 percent against the US dollar, adding to the nine percent depreciation witnessed in 2022.
Currency weakness spells trouble for inflation which is running at 6.9 percent as at the end of October. But more importantly, it provides a big incentive for foreigners holding local assets to cut and run. Some reports show that in the nine-month period to September 2023, 6,256 foreign investors fled the NSE. As a whole, the NSE is posting some of the worst dollar returns.
