Foreign investors at the Nairobi Securities Exchange (NSE) made net sales for the second straight month, with the market paying the price as all indices closed July in the red.
Market data compiled by Standard Investment Bank (SIB) shows the investors sold a net of Sh2.05 billion worth of stock last month, following on from the net sales of Sh903 million in June.
In the previous four months (February to May), they had been recording net inflow positions, totalling Sh4.4 billion.
Analysts at Genghis Capital say the market might remain subdued in coming months, partly due to investor caution if global growth is below par and US-China trade tussles continue.
“Additionally, we note that Kenya does not seem to offer any discount compared to its frontier peers going by its price to earnings (P/E) multiple of 11.6 times versus the frontier average of 11.5 times,” said Genghis in a market strategy note.
With a weaker shilling compared to the beginning of the year, foreign investors are likely to be wary of diminishing dollarised returns from the Kenyan market.
Last month, the NSE 20 Share Index shed 0.2 percent while the All-Share Index was down by 0.9 percent.
Blue chip firms had the largest net foreign outflows, led by Equity Holdings #ticker:EQTY at Sh761.6 million and Safaricom #ticker:SCOM at Sh531 million.
Others were Stanbic #ticker:CFC with net outflows of Sh329 million, EABL #ticker:EABL at Sh2767 million, KCB #ticker:KCB at Sh239 million and Barclays Kenya #ticker:BBK at Sh169 million.