Foreign investors pulled out their investments from the Nairobi Securities Exchange (NSE) at a record pace in 2020 as the value of most stocks dipped. Net foreign outflow amounted to KSh28.63 billion in 2020, compared to a net foreign inflow of KSh 1.38 billion in 2019 according to the Capital Markets Authority Quarterly Statistical Bulletin Q4 2020.
Foreign investors remained the largest participants on the Nairobi bourse despite the huge capital flight. In December 2020, the participation of foreign investors stood at 61.79%. The average foreign investors’ participation in Q4. 2020 accounted for 65.97% of all the transactions at the NSE.
The report by CMA notes that local and foreign investors moved their investments from listed equities to other asset classes such as bonds and mutual funds as they sought to minimize losses from the bearish NSE.
Due to the high demand for bonds by investors fleeing the equities market, bonds recorded the highest annual turnover in the history of Kenyan Capital Markets. The annual bond turnover reached KSh 691.83 billion in 2020, 5.6% higher than the 2019 bond turnover of KSh655.06 billion.
Treasury bonds turnover stood at KSh 690.67 billion in 2020, representing 99.83% of the total bond turnover while corporate bond turnover stood at KSh1.184 billion representing only 0.17% of the total bond turnover in Kenya.
Alternative assets at the NSE such as Real Estate Investment Trusts (REITs), and Exchange Traded Funds (EFTs) registered a remarkable rise in activity in the past year according to the CMA quarterly report.