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Capital Markets

NSE sheds Sh76bn from the mid-February peak

Stockbrokers
Stockbrokers at the Nairobi Securities Exchange. FILE PHOTO | NMG 

The Nairobi Securities Exchange (NSE) has shed Sh76.29 billion in terms of shareholder wealth on sustained decline of share prices of key counters, reversing the peak attained mid last month.

From the peak market capitalisation — which represents investor paper wealth — of Sh2.403 trillion on February 11, share prices for many top counters have been on decline, closing the bourse at combined value of Sh2.32 trillion on Thursday.

The fall reverses the gain in February which saw foreign investors take net buying positions for the first time in 16 months, with an eye on dividend and capital gains on a number of blue-chip firms.

Data compiled by Nairobi-based Standard Investment Bank (SIB) had showed that foreigners had net inflows of Sh219 million, with the bulk of the buys coming through Safaricom #ticker:SCOM and East Africa Breweries Ltd #ticker:EABL.

The latest decline in unrealised wealth of investors at the bourse is also mirrored in the top 20 stocks that are represented in the main NSE index.

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From a peak of 3,070.33 points on February 13, the NSE 20 Share index closed Thursday at 2,868.81 points. This means it has shed 201.52 points over this period, pointing to dropping prices.

A drop in NSE 20 at the end of last week was attributed to 3.2 per cent week-on-week decline of British American Tobacco #ticker:BAT stock, which was also the highest mover of the week. This is according to Genghis Capital data that also showed sustained buying by foreigners.

“Foreign investors accounted for about 83.3 per cent of total week’s trade up from 68.8 per cent in previous week, recording net inflows of Sh231.18 million,” said Genghis Capital.

“As companies continue to release their 2018 financials, we might see an uptick in activity in the coming weeks with trading still on the index counters.”

The market has displayed mixed reaction since January, having opened the first week on losing streak before beginning to gain momentum.

Focus in coming days will be on the equity turnover, with the exit of KenolKobil #ticker:KENO imminent.

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