Local investors push NSE shares Sh100bn higher

Shares at the Nairobi Securities Exchange (NSE) have defied sustained sell-offs by foreign investors to post a gain of 4.3 percent since the beginning of the year, adding Sh101 billion to investor paper wealth.

The bourse ended last week with a market capitalisation of Sh2.2 trillion, mainly on the back of gains by banks and Safaricom. #ticker:SCOM

The gains have come despite nine straight weeks of net sales by foreign investors, according to an analysis done by Standard Investment Bank (SIB).

Foreign selling was seen as a major factor in pulling the market down last year, especially when it was combined with apathy from local investors on the demand side of the market.

While foreigners have also dominated trading this year, accounting for about 75 per cent of equity turnover this month, growing demand from locals chasing dividends has helped buoy share prices.

Local investor activity

“We noted increased local investor activity in the week, which we expect to continue into the following weeks as they get back to full trading mode for the year,” said Genghis Capital analyst Grace Wangeci in a note.

The NSE All-Share index was up 0.8 percent last week, a year-to-date gain of 4.3 percent, while the NSE 20 Share Index rose two per cent to bring its year to date gain to 2.6 percent.

The financial stocks heavy NSE 25 share index, which was up 1.9 per cent last week, is the best performing index this year with a gain of 5.3 per cent on the back of higher prices on eight of the 12 listed bank stocks.

Lenders are due to release full-year 2018 results by the end of February, with investors looking keen to tie in the current lower prices seen in order to raise their dividend yields.

The banks are on average expected to announce higher profits compared to 2017, going by the trend observed in the financial results for the nine months to September 2018.