Capital Markets

Safaricom, EABL rally lifts NSE Sh197bn in four weeks

Stockbrokers at the Nairobi Securities Exchange. FILE PHOTO | NMG
Stockbrokers at the Nairobi Securities Exchange. FILE PHOTO | NMG 

Market capitalisation at the Nairobi Securities Exchange has grown by Sh197 billion in the past four weeks, beefed up by gains by Safaricom #ticker:SCOM stock that has in the past week touched an all-time trading high of Sh24.

Investor wealth now stands at Sh2.222 trillion, with the market undergoing a revival in the second quarter of the year.

The two largest companies by capitalisation at the bourse, Safaricom and East African Breweries #ticker:EABL, have led the gains adding Sh110 billion and Sh22 billion respectively to their valuation in the past month.

They have been attracting heavy foreign investor demand in the past week, with the brewer climbing to a seven-month high of Sh260 per share.

“On sustained foreign investor demand, Safaricom touched a new all-time high of Sh24. EABL was the best performing top mover (up eight per cent week-on-week) on increased foreign investor trading,” says Standard Investment Bank in their latest weekly market summary.

The performance of a number of large cap stocks has pushed the NSE 20 share index up by nine per cent in the past one month, while the all share index is up 9.7 per cent in the period. Since the beginning of the year, the two indices are up 12.4 per cent and 14.7 per cent.

The market has now shown signs of breaking out of its prolonged bear run which set in from March 2015.

The rising valuations have attracted inflows from foreign investors, but have also seen some local retail investors start to take positions in the market after largely keeping off last year.

The gains in the past month have been spread across different industry segments with banks such as Equity #ticker:EQTY, Barclays #ticker:BBK, DTB #ticker:DTK and I&M #ticker:I&M, insurance firm Britam #ticker:BRIT and power generator KenGen #ticker:KEGN all standing out.

Among the banks, Equity has seen a gain of Sh11.3 billion in capitalisation, with its price up by Sh3 per share to Sh38 since mid-May.