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Investors lose 390 mln USD at Nairobi bourse this week

Xinhua, July 12, 2015 Adjust font size:

Investors at the Nairobi Securities Exchange (NSE) lost about 390 million U.S. dollars this week as the market recorded a major decline.

Data from the NSE received Saturday indicates that market capitalization, which measures shareholders wealth, dropped from 22.73 billion dollars to 22.34 billion dollars.

It is one of the biggest losses in recent weeks as foreign investors' participation remained stifled, with many selling their stocks in search for better opportunities elsewhere, particularly, in Egypt and Nigeria securities exchanges.

However, not only market capitalization declined this week, other key indices of the bourse also dropped.

"The NSE recorded a decline across the equities segments of the market, highlighting the impact of emerging risks from domestic and external sources during the week," said CBK analysts in their weekly analysis.

The domestic risks include the tightening of the monetary policy by the CBK, which increased the base lending rate from 10 percent to 11.5 percent.

This follows the rapid decline of the shilling this week to exchange against the U.S. dollar at an average 100.

Equity turnover recorded a 46.24 percent decrease on account of fall in share prices and a 24.5 percent decline in shares traded to close the week at 85 million dollars.

The Nairobi All Share Index (NASI) and NSE 20 Share Index lost 1.7 percent and 1.8 percent respectively to end the week at 159.59 and 4,754.66.

On the other hand, the FTSE NSE Kenya 15 Index and FTSE NSE Kenya 25 Index, which measure stock performance of 15 largest companies by market capitalization and the 25 most liquid stocks at the NSE respectively, closed the week at 209.19 and 208.10.

During the week, the most traded stocks were in the telecommunication and technology, banking and manufacturing, and allied sectors, contributing 52 percent, 30 percent and 5.4 percent of the total shares traded respectively.

The bond market too recorded a sharp decline, with turnover dropping to 24.4 million dollars from 36 million dollars the previous week. Endi