Net foreign outflows at the Nairobi bourse eased in November compared with October largely on increased investment in banking stocks following the removal of interest rate caps.
Foreign investors moved a net of Sh727.36 million (where $1 is equivalent to Sh102.59) from the Nairobi Securities Exchange (NSE), 43.05 percent less than nearly Sh1.28 billion in October, SIB analysts showed in their monthly report.
November marked the second month in a row that NSE has posted net foreign capital outflows in line with a trend being witnessed elsewhere in emerging and frontier markets. Foreign investors were, however, in net buying position in the first (Sh785.84 million), second (Sh1.32 billion) and third quarter of the year (Sh121.06 million), despite sell-offs in the first two months of the fourth quarter.
Safaricom #ticker:SCOM whose shares traded at an average of Sh29.25 a unit, a 1.7 percent drop compared with a month earlier, topped the list of stocks with net foreign sell-offs at nearly Sh1.13 billion.
The NSE’s most valued firm was followed by East African Breweries #ticker:EABL where net outflows stood at Sh230.09 million, BAT Kenya #ticker:BAT (Sh115.83 million), Britam #ticker:BRIT (Sh58.59 million) and NCBA #ticker:NIC (Sh23.95 million), according to SIB data.
KCB Group #ticker:KCB, on the other hand, experienced the highest foreign net buying with Sh511.84 million in the month after the three-year ceiling on loan interest charges was scrapped following a miscellaneous amendment to Banking Act.
DTB #ticker:DTK came second with a net foreign inflow of Sh157.73 million followed by Co-operative Bank #ticker:COOP (Sh109.60 million), Centum #ticker:ICDC (Sh64.23 million) and Stanbic Holdings #ticker:CFC (nearly Sh36.68 million).
The market had posted a 0.4 percent gain in the first quarter, but lost 7.5 percent and 7.6 percent in second and third quarter respectively.
During the month, the stock market slipped back into the red after the benchmark NSE-20 Share Index shed off 0.9 percent compared with 8.7 percent gain in October.
“The decline was driven by losses in large-cap bank stocks … owing to the market re-adjusting after the bullish trend in October owing to expectations of the repeal of the interest rate cap,” analysts at Cytonn Investments said in a monthly note to investors.
NCBA Group shares suffered the biggest slide on its price at 10.7 percent followed by Barclays Bank of Kenya (6.4 percent), Standard Chartered (5.8 percent) and KCB Group (3.4 percent).