The NSE 20 Share index, a key index that tracks the performance of top 20 most capitalized firms listed at the bourse, on Monday’s trading session fell below the 2,000 mark, losing 3.30% to close at 1958.55, the lowest since mid-2003.
The decline has been attributed to foreign investors who have been exiting the market after Kenya confirmed its first case of covid19. This led to the downward trend in index performance with foreign investors being net sellers.
The banking sector, which is in its reporting season, has seen several firms release their 2019 financial results. But the sector accounted for only 18.94 per cent of Monday’s traded value. Equity, KCB and ABSA were on the list of top losers today. Equity Bank lost 8.34 per cent as its share price fell to KSh 35.70 from the previous KSh 38.95. KCB share prices fell from KSh 40.55 to KSh 37.45.
A fall in the NSE 20 share index to below the 2000 points level, indicates continued instability in market activity as both local and foreign investors give the bourse a wide berth.
While it was expected that investors would take advantage of online and mobile trading platforms, participation at the market remains low. On Monday’s trading session, turnover fell by 41% to Ksh 455.83 million compared to Friday’s total turnover of Ksh 778 Million.
The Central Depository and Settlement Corporation(CDSC) has provided alternative channels to be used for delivery of physical documents to minimize physical contacts, pushing the mostly old school middle-aged investors, away from trading activities.
While discounted prices of listed stocks was expected to offer an attractive entry point for both local and foreign investors, activities at the bourse indicate otherwise.
“The ongoing trading trends reflect normal market cycles and portfolio shifts as investors look to take profits during this reporting period. I urge investors to take advantage of this lucrative opportunity to own a piece of Kenya’s most profitable firms at these reduced prices,” said Mr Geoffrey Odundo, NSE Chief Executive Officer in a recent statement to reassure the market.