Foreign investors pull Ksh.32 million from the NSE in April


Foreign investors pull Ksh.32 million from the NSE in April
A display of listed equities at the NSE. PHOTO | CITIZEN DIGITAL

In Summary

  • The extended sell-offs which now total Ksh.990.8 million ($9.2 million) in the year to date has been matched by declining activity at the NSE.
  • The local equities market was however on an upward trajectory during the month with the three primary indices recording gains in the period.
  • Last week for instance, Safaricom’s share price touch an all time high of Ksh.40.40 after its submission of a bid for a telecoms license in Ethiopia taking its market valuation to Ksh.1.6 trillion.

Foreign investors continued to exit the domestic stock market in April culminating in a net selling position of Ksh.32.3 million ($0.3 million) during the month.

The sell-off position however contracted sharply from Ksh.958.5 million ($8.9 million) in March.

The continued exit of foreign investors from the Nairobi Securities Exchange (NSE) is largely attributable to the depressed macroeconomic environment as the country feels the heat of the evolving COVID-19 pandemic.

The extended sell-offs which now total Ksh.990.8 million ($9.2 million) in the year to date has been matched by declining activity at the NSE.

For instance, Equity turnover in April declined by 16.8 per cent to Ksh.9.8 billion from Ksh.11.8 billion in March.

The local equities market was however on an upward trajectory during the month with the three primary indices recording gains in the period.

The Nairobi all share index (NASI) marked gains of 6.6 per cent ahead of the NSE 25 and NSE 20 indexes which had gains of 4.1 and 1.1 per cent respectively.

In the year so far, NASI and the NSE 25 index have marked gains of 11.3 and 7.8 per cent respectively while the NSE 20 index has marked marginal losses of 0.3 per cent.

The gains for the market have been driven by a share price rise for blue-chip firms including Safaricom, Bamburi, EABL and Diamond Trust Bank (DTB).

Last week for instance, Safaricom’s share price touch an all time high of Ksh.40.40 after its submission of a bid for a telecoms license in Ethiopia taking its market valuation to Ksh.1.6 trillion.

The bulk of stocks on the NSE nevertheless remain slightly undervalued with the current price to earnings ratio of 12.8 times remaining 0.9 per cent below the seven year historical average of 12.9 times

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Story By Kepha Muiruri
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