Capital Markets

Outflows hit 4-year high as foreigners cash in at NSE

Weekly foreign investor outflows rose to the highest level since 2014 as investors cashed in on blue chips whose prices have gone up in recent weeks, market data compiled by Standard Investment Bank (SIB) shows.

The SIB data shows that the net outflows stood at Sh3 billion for the five days, even as foreign investor participation in the market (as a percentage of total equity turnover) fell below 50 per cent.

The foreigners were most actively selling in Safaricom #ticker:SCOM, Equity Bank #ticker:EQTY, KCB, KenolKobil #ticker:KENO and Bamburi #ticker:BAMB, which together accounted for 89 per cent of total foreign traded turnover.

“Foreign investors remained net sellers for the third straight week recording net outflows of $ 29.3 million (Sh3 billion)— highest on record since 2014.

“At 40 per cent of total net outflows, Safaricom had the highest net foreign outflows at $11.7 million (Sh1.18 billion),” said SIB in its weekly market report.

“Banking stocks also witnessed notable foreign investor selling jointly accounting for 42.9 per cent of total net outflows.

Overall, foreign investor participation was down to 47.6 per cent from 53 per cent in the previous week.”

The foreign investors have now been making net sales for the last three weeks. The trend of cashing in on high price blue chips took roots last month, when they recorded net sales of Sh1.4 billion.

While Safaricom was the leading stock in outflows, banks such as Equity and KCB, oil marketer Kenol Kobil, EABL #ticker:EABL and cement firm Bamburi also featured.

These stocks have all recorded double-digit share price gains over the past one year.

KCB’s share price has gone up by 76 per cent to Sh45 since February 2017, Safaricom by 56 per cent Sh28.75, Equity by 43 per cent to Sh43, Bamburi by 20 per cent to Sh175 and KenolKobil by 14 per cent to Sh15.05.

“The top five foreign traded counters recorded an overall selling sentiment, with investors taking profit on Safaricom, KCB #ticker:KCB and Equity whose prices have been oscillating in the week.

“The top five foreign traded counters accounted for 88.8 per cent of total foreign participation in the week,” said Genghis Capital analyst Grace Wangechi in a note.