Foreigners hold over 21bn shares at NSE

The percentage of issued shares at the Nairobi Securities Exchange (NSE) in the hands of foreign investors rose above the 20 percent level at the end of June, following a sustained buying stance in the lead up to the half-year mark.

Capital Markets Authority (CMA) data on investor profiles at the NSE shows that foreign investors — who held 19.9 percent of the issued shares at the end of last year — now account for 20.9 percent, equivalent to 21.3 billion shares.

The percentage held by foreign investors had fallen below 20 percent for the first time in six years in 2018 due to sustained sell-offs for the second half of the year as investors shifted capital to safe-haven western markets due to global economic uncertainty.

This year has seen some reversal of this trend though, with the foreign investors making net buys in the market for four straight months between February and May, totalling Sh4.4 billion.

“Local investors, a sum of East African institutional and individual investors accounted for 79.1 percent of shares held in the equity market with 20.91 percent being held by foreign investors,” said the CMA in its second-quarter 2019 market soundness report.

In June and July though, there has been net sales on the foreign desk, which might once again tilt downwards the percentage holdings if sustained to the end of the year.

There are 101.8 billion issued shares at the bourse, with the bulk (67.5 percent or 68.7 billion units) held by East African institutional investors who include fund managers, insurance firms and pension funds. East African individuals hold 11.6 percent of the shares, equivalent to 11.8 billion units.

The CMA, however, expressed concern over the dominance of foreign investors in trading activity in spite of their lower holdings of shares compared to locals.

In the first quarter of the year, the foreign investors accounted for 76.96 percent of traded turnover at the bourse and 69.62 percent in the second quarter.