Capital Markets

Foreigners net Sh1.4bn out of NSE blue chips


Brokers on the Nairobi Securities Exchange floor. file PHOTO | NMG

Foreign investors made net sales of Sh1.4 billion from the Nairobi bourse in January, cashing in on blue chips whose prices rose during the month.

Market data compiled by the Standard Investment Bank (SIB) shows the bulk of foreigners’ activity was on the stocks of Safaricom #ticker:SCOM, East Africa Breweries Ltd #ticker:EABL, Equity Bank #ticker:EQTY, Cooperative Bank #ticker:COOP and KCB #ticker:KCB.

They dominated the market during the month, accounting for 71.4 per cent of equity turnover which stood at Sh20.3 billion.

“The price increase, especially on Safaricom, made it attractive for some foreign funds to book profits, with the demand coming from local funds,” said an investment bank dealer.

Safaricom led the market in net foreign outflows at Sh764 million, with its share price going up by 10.3 per cent during the month.

The telco ended January at Sh29.50 a share (it hit its all-time trading high of Sh30.50 last week) giving investors who had held the stock from the beginning of the year when it traded at Sh26.75 a gain of Sh110 billion in capitalisation or investor wealth.

EABL, Equity Bank, Cooperative Bank and KCB recorded net foreign outflows of Sh302 million, Sh218 million, Sh210 million and Sh188 million respectively.

All these counters were in the black last month in share price up between 3.4 per cent and 8.2 per cent. They have for long time been a favourite of foreign investors because they have the necessary liquidity to support large trades.

Their blue chip status also means they are likely to hold value better compared to smaller counters, thus offering solid investment credentials for large funds that are not interested in speculating for a quick profit.

READ: Foreign investors share of trade at NSE on the rise

On the other end, the list of net foreign inflows was led by Bamburi #ticker:BAMB, at Sh92 million, followed by Centum #ticker:ICDC at Sh74 million and Stanbic Bank #ticker:CFC at Sh72 million.

The indices were all in the black during the month. The NSE 20 share index was up 0.7 per cent, while the NSE all share index and the NSE 25 share index were up 5.5 and 5.4 per cent respectively.

The top gainers during the month were TPS Eastern Africa #ticker:TPSE at 14.6 per cent, Barclays Kenya #ticker:BBK at 10.4 per cent and Safaricom at 10.3 per cent.
On the losing end were smaller caps led by Uchumi #ticker:UCHM at -22.8 per cent, Nairobi Business Ventures #ticker:NBV at -22.4 per cent and Deacons #ticker:DCON at -18.6 per cent.