The NSE sees its best day of trading in 2020


The NSE sees its best day of trading in 2020
A display of listed equities at the NSE Photo taken on August 1,2019. PHOTO | CITIZEN DIGITAL

In Summary

  • The daily turnover was up five times from a previous Ksh.550 million as the volume of shares traded increased by seven fold to 123.6 million.
  • Last month, the foreign investors ended a seven month net-sell off position to close with a net buying position (Ksh.195 million) for the first time since January.
  • Stocks listed on the NSE continue to present key entry points for both local and foreign investors with as the market continues to trade below its historical average.
 

The Nairobi Securities Exchange (NSE) marked its best day of trading in 2020 on Thursday as turnover hit a record Ksh.3.76 billion.

The daily turnover was up five times from a previous Ksh.550 million as the volume of shares traded increased by seven fold to 123.6 million.

The bourse has attributed the remarkable performance to the rebounding foreign investors’ interests on local stocks.

“Today’s performance is a testament of improving investor sentiments as listed securities in our market continue to show impressive recovery,” noted the Chief Executive Officer to the NSE Geoffrey Odundo.

Foreign participation in the trading session rose to 85.8 per cent from 61 per cent on Wednesday with the investors closing the day with a net buying position of Ksh.400 million.

Safaricom, Equity Group. Kenya Re and the East African Breweries Limited (EABL) represented the top market movers by volume while Eaagads, Crown Paints and Umeme Limited represented market leaders by share price appreciation.

All three indices- the NSE 25, NSE 20 and the Nairobi All Share Index (NASI) were however down in the session at 3220, 1844.6 and 139.8 points respectively.

The return of foreign investors who largely dictate the direction of the market marks a continued return of investor confidence following shocks resulting from the COVID-19 pandemic.

Last month, the foreign investors ended a seven month net-sell off position to close with a net buying position (Ksh.195 million) for the first time since January.

Stocks listed on the NSE continue to present key entry points for both local and foreign investors with as the market continues to trade below its historical average.

In August for instance, the market was trading at a price to earnings ratio of 9.5 times against a historical average of 13 times.

Moreover, the NSE key indices have continued to linger in bear territory with the year to date (YTD) performance of the NSE 25, NASI and NSE 20 closing the last week with losses of 15.3, 20.5 and 29.3 per cent respectively.

The NSE market capitalization has similarly fallen to Ksh.2.1 trillion from Ksh.2.7 trillion at the start of the year.

The advent of the pandemic in February and March saw foreign investors dump stocks valued in the billions are they sought safe haven investments to weather the storm.

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Story By Kepha Muiruri
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