- Investors at the Nairobi Securities Exchange (NSE) lost $263.5 million (Sh34 billion) in paper wealth in the three months to September 2024.
- The volume of shares traded decreased slightly by 0.65% to 1.092 billion compared to 1.097 billion in Q2 2024.
- In the bond market, the turnover decreased by 29.37%, with Sh323.61Bn traded in Q3 compared to Sh458.2Bn in prior quarter.
Investors at the Nairobi Securities Exchange (NSE) lost $263.5 million or Sh34 billion in paper wealth in three months to September as the country recovered from shocks of the bloody Gen Z protests in June. The third quarter Statistics released by the Capital Markets Authority shows the market capitalisation at the Nairobi bourse dropped by 2.01 per cent during the period to Sh1.67 trillion from Sh1.71 trillion.
The $263.5 million drop in paper wealth is, however, lower than the $410.7 million (Sh53 billion) hit suffered in the three months to June. The volume of shares traded decreased slightly by 0.65 per cent to 1.092 billion compared to 1.097 billion in Q2.2024.
The NSE All Share Index, a market cap-weighted index consisting of all the securities on the bourse also decreased by 2.20 per cent to 107.08 points from 109.49 points in Q2, 2024.
Although the capital markets regulator did not give reasons for the marginal drop-in activities at NSE, a market insight released by the Kenya Institute for Public Policy Research and Analysis (Kippra) shows that the loss majorly resulted from a 2.97 drop in the total value of shares traded in the period.
“The period was marred by political tensions – mostly occasioned by the Gen Z-driven demonstrations – raising uncertainties among investors, which worsened market conditions,’’ the report read.
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Nairobi Securities Exchange performance
In the bond market, the bond turnover decreased by 29.37 per cent, with Sh323.61 billion traded in the third quarter this year compared to Sh458.2 billion in the preceding three month period.
Even so, other performance metrics at the NSE defied the protests to continue with the recovery that had picked pace since the shilling stabilised against major international currencies after a year-long drop that saw it shrink to a historic low of 160 units against the dollar.
For instance, the equity turnover increased by 48.9 per cent to Sh28.39 billion from Sh19.07 billion in the three months to June 2024. The rich NSE 20 Share Index increased by 7.19 per cent to 1,775.67 points from 1,656.50 points in Q2.
The year-on-year comparison shows investors’ paper wealth increased by Sh183 billion with all indices indicating a bull market. At the same time, the index that tracks the performance of blue chip firms at the bourse increased 17.69 per cent to 1,775.67 points in the third quarter from 1,508.75 points in the corresponding quarter in 2023.
All Share Index increased by 2.33 per cent to 107.08 points with the equity turnover on the other hand increasing to Sh17.39 billion from Sh17.22 billion.
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Foreign investors at the NSE
While investors are sensitive to uncertainties, foreign investors at the Nairobi bourse maintained their calm amid anti-government protests that saw the national Parliament razed. Statistics show that foreign investor inflows during the period outpaced outflows at Sh0.63 billion, compared to an inflow of Sh2.98 billion recorded in second quarter.
In the bond market, the bond turnover increased by 119.5 per cent to Sh391.04 billion from Sh196.30 billion in Q3.2023. The derivatives market registered a 21.9 per cent increase in turnover during the quarter under review, closing Sh45.3 million compared to Sh14.93 million.
Additionally, the number of contract deals and volume increased by 11.14 per cent and 18.63 per cent, respectively. Despite the performance, the NSE is eyeing a boost in foreign investor participation after the inclusion of five more Kenyan listed companies in Morgan Stanley Capital International’s (MSCI) frontier market indices.
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