The Nairobi Securities Exchange has witnessed a slump in market activity over the last two weeks.
Available data indicates that turnover has been on a slide, from KSh 1 billion at the end of the first week of February to KSh 444 million at the close of Friday last week. On the week ending 14th February, turnover at the NSE stood at KSh 961 million.
At the close of last week, the NSE 20 share index shaved-off 60.11 points or 2.35per cent to settle at 2498.94. This is compared to 2559.05 at the close of the week ended 14th February 2020.
A market report by Standard Investment Bank (SIB) shows that the benchmark indices sustained the downward momentum, mainly on price dips of the majority of the large caps. The SIB report indicates that weekly market activity slumped 24.9 per cent to US$ 24.5million compared to the previous week.
Safaricom was the most traded counter, accounting for 59.7per cent of total turnover, followed by KCB at 18.1per cent and Equity Bank at 9.0per cent.
“As a testament of the bearish sentiment engulfing the bourse, all the top movers registered price declines, with Safaricom leading the pack, down 3.5per cent on foreign selling. The telco, as a result, attracted the bulk of the outflows of the week of US$ 10.6million,” said the SIB note.
The decline in activity at the NSE is shown by foreign investors, who were net sellers for the second successive week. They recorded net outflows of US$ 14.7million, 52.5per cent higher than the previous week. Their participation stood at 59.2per cent, a slight decline from last week’s 61.1per cent.
“Our market is foreign-dominated. With the hit on global markets by the Corona Virus, now taking a geographical parabolic wave, foreign investors are selling to move to much safer assets especially Gold,” said Felix Ochieng, a dealer at Faida Investment Bank.
He added that with while activity at most global equity markets are on a slide, there could be a brief bull run at the NSE. “This is when listed firms begin to announce their Q4 results, attracting foreign investors back to the bourse. A blanket cast on the bourse because of the cloudy political climate in Kenya could cut short this run,” said Mr Ochieng.