Capital Markets

NSE sheds Sh24bn for second day as industrial stocks stumble

A man monitors trading at the bourse. FILE PHOTO | NMG 

The NSE ceded further ground on Monday as industrial blue chips continued their price decline, led by EABL #ticker:EABL whose share price slid to a six-and-a-half year low.

Market capitalisation — the measure of investor wealth —stood at Sh2.532 trillion by close of trading, from Sh2.556 trillion on Friday, going down by Sh24 billion for the second straight trading session.

The NSE 20 Share Index closed 1.1 per cent or 37 points lower at 3259. The most significant price fall among the blue chips that make up the NSE 20 share index was by East Africa Breweries Ltd and BAT Kenya #ticker:BAT, which retreated 5.4 per cent and 2.1 per cent respectively in yesterday’s trading.

The brewer closed the day at Sh194 a share, having fallen from Sh205 on Friday, while BAT was Sh13 lower at close of trading at Sh605 a share. These two firms tend to have a significant impact on the NSE 20 index whenever their prices move up or down. The index is price weighted, meaning that the constituent stocks with high nominal prices have a large weight on its movement.


Other large blue chip share prices saw limited price movement Monday, with Safaricom #ticker:SCOM unchanged at Sh29 a share. Equity Holdings #ticker:EQTY and KCB #ticker:KCB were both 50 cents down at Sh49.50 and Sh47.50 respectively, while Cooperative Bank #ticker:COOP closed 60 cents lower at Sh16.

Analysts at Genghis Capital said in a market note that the market was once again dominated by foreign investors, a trend that has seen share prices come down given that most of their activity in recent months has been on the net sell side.

Traded turnover Monday stood at Sh270 million, down by nearly half from Sh506.6 million on Friday, with foreigner investors accounting for 63.8 per cent of the turnover.

The NSE 20 share index is 12.2 per cent down year-to-date, with foreign investor flight the biggest cause as capital flows back to safe haven markets like the US where interest rates have been rising.