Capital Markets

Blue chips lift Nairobi bourse in November

Nairobi Securities Exchange
An investor at the Nairobi Securities Exchange on August 1, 2014. FILE PHOTO | NMG 

The performance of the Nairobi Securities Exchange (NSE) slightly ticked up in November as share prices of large companies rose on the back of renewed demand from investors taking advantage of low valuations to enter the market.

The NSE All Share Index was up 1.2 percent during the month, compared to a decline of 3.6 percent in October, while the benchmark NSE 20 Share Index shed just 0.5 percent compared to 2.3 percent the previous month.

Large cap counters, which have a larger weight on the market cap-weighted All Share index generally recorded better performance in the period, led by industrial stocks BAT Kenya #ticker:BAT and East Africa Breweries Ltd (EABL) #ticker:EABL which rode renewed foreign investor demand to go up by 9.3 and 8.6 percent respectively.

“The equities market performance during the month was driven by gains in large caps stocks such as EABL, Standard Chartered #ticker:SCBK, Cooperative Bank #ticker:COOP, BAT and KCB Group #ticker:KCB,” said Cytonn Investments monthly markets summary for November.

Safaricom #ticker:SCOM and Equity Bank #ticker:EQTY were also in the black during the month, gaining 2.2 and 0.6 percent respectively.

The market was able to arrest the recent slide largely due to a change in sentiment by foreign investors, who cut back significantly on selling activity that had characterised the bourse for months.

“Foreign investors remained net sellers, although the net selling position declined by 86 percent month-on-month to Sh597 million from Sh4.3 billion in October,” said Cytonn.

EABL led the market in net foreign buys during the month, at Sh242.3 million, data from Standard Investment Bank showed, followed by BAT at Sh32.6 million.

On the outflow side KCB and Safaricom led with net sells of Sh534.5 million and Sh197 million respectively.