The Nairobi Securities Exchange(NSE) experienced a rise in Equity Market Turnover in the last three six months to KSh 36.31 Billion compared to KSh 31.36 Billion in the quarter ended September 2021.
However, Year on year performance showed that in 2021, NSE Equity Turnover decreased by
7.58% at KSh.137.41 Billion compared to KSh148.68 Billion recorded in 2020.
According to the latest Quarterly Statistical Bulletin by the Capital Markets Authority(CMA)Q4.2021 saw a decline in NSE market capitalization compared to the position as at the end of Q3.2021; dropping from KSh 2,778.65 Billion to KSh 2,592.92 Billion.
“Nonetheless, during the year, Equity investor wealth grew by 10.97% as indicated by the growth in market capitalization from KSh 2,336.70 Billion in December 2020 to KSh 2,592.92 Billion in December 2021,” said Wyckliffe Shamiah, CMA Chief Executive.
The Kenyan bond market in 2021 had more activity than the equities market.
The NSE bond market in 2021 had a turnover of KSh 956.97 Billion compared to KSh 691.83 Billion in 2020, representing a 38.33% increase.
“This significant change was partly due to attractive infrastructure bonds issued during the year that spurred investor participation owing to their good returns and tax-free nature. For example, the September 2021, Infrastructure bond issue seeking to raise KSh75 Billion recorded a performance rate of 201.67% after bids worth KSh151.26 Billion were submitted,” said Shamiah.
NSE Bond Market Activity
However quarter to quarter comparison shows that the NSE bond turnover decreased by 38.47% from KSh 301.09 Billion in September 2021 to KSh 185.26 Billion in December 2021.
In the primary Treasury bonds market, a quarterly analysis indicates that during Q4. 2021, seven Treasury bonds were issued (5 reopening and 2 new issues). In issuing these bonds, the government sought to raise a total of KSh150 Billion and received bids worth KSh 180.82 Billion. The government accepted bonds worth KSh 159.38 Billion, indicating an aggregated 88.14% acceptance rate.
In the secondary bonds market, the bond market turnover decreased in Q4 2021 by 38.48% with KSh 185.25 Billion worth of bonds being traded compared to KSh 301.10 Billion traded in Q3. 2021.
Year on Year comparison between Q4.2021 and Q4.2020 indicate that the NSE turnover increased
by 10.97% recording KSh 185.25 Billion in Q4.2021 compared to KSh 169.25 Billion recorded in
Q4.2020
In the corporate bond market, there was an oversubscription of 345% reported for the East African Breweries Plc (EABL) medium term notes.
Earlier on, CMA had approved the issuance and listing of a five-year, fixed ratenmedium term note seeking to raise KSh11 billion with EABL receiving applications worth nearly Ksh. 8 billion.
During the year, the Authority also approved the issuance and listing of the Centum Investments Company Plc KSh 4 billion medium-term note with a KSh 2 billion green shoe option, and the KSh 8 billion multicurrency Family Bank medium-term note.
The latter recorded an oversubscription of 147 percent. As part of its efforts to facilitate affordable housing, which is a pillar of the Big Four National Government agenda, the Authority approved the issuance of a secured KSh3.9 billion Medium Term Note programme for Urban Housing Renewal Development Limited.
“This is a major milestone which positions the capital markets as a source of funding to support productive economic activities such as delivery of affordable housing, which is one of the pillars of the National Big Four Agenda,” said Shamiah.
As at September 30, 2021, the total assets under management by the Collective Investment Schemes were KSh 126.05 Billion, a 7.03 percent increase from KSh117.77 Billion managed in the quarter ended June 30, 2021.
The Authority remains confident that collaboration among the capital markets stakeholders will strengthen the industry’s ability to weather any current or future uncertainties.
“In addition to this, following the review of the Capital Market Master Plan (CMMP, 2014-2023), we expect that the full implementation of the Master Plan will lead to increased capital mobilization towards the real economy, enable the roll out of alternative products and facilitate the strengthening of regulatory frameworks,” said Shamiah.
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