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Obama's Kenya visit fails to "excite" Nairobi bourse

Xinhua, July 25, 2015 Adjust font size:

Securities trading at Nairobi bourse remained stifled this week as the visit by U.S. President Barack Obama to Kenya failed to "excite" the market.

The U.S. leader is on a three-day visit to Kenya, where he will address the Global Entrepreneurship Summit (GES) and hold bilateral ties with Kenyan president Uhuru Kenyatta.

The high-profile visit has seen various business leaders from across the world into Kenya.

Some analysts had expected that the Obama visit would boost investors' confidence in the East African nation, particularly at the stock market, where most foreign investors have sold their shares and fled to Egypt and Nigeria.

All the key indices of the Nairobi Securities Exchange (NSE), however, continued with a downward spiral this week, heaping more losses to investors, particularly, foreign ones.

Data from NSE and Central Bank of Kenya (CBK) released on Friday shows that equity turnover dropped almost 49 percent mainly due to decline in shares traded.

"Equity turnover went down 48.7 percent as a result of 34.61 percent drop in shares traded and general decline in prices," the CBK said in their weekly report on the market.

During the week, equity turnover stood at 36.4 million U.S. dollars, down from 70 million dollars the previous week. Total shares traded stood slightly above 120 million, down from 190 million dollars the previous week. The Nairobi All Share Index (NASI) shed 1.5 percent while the NSE 20 Share Index 3 percent.

Market capitalization, which measures shareholders wealth, too was on a downward spiral as in the previous week.

Investors at the stock market this week lost 1.5 percent of their wealth or an equivalent of 328 million dollars. The index closed the week at 21.4 billion dollars, down from 21.9 billion dollars.

As the other indices, market capitalization has been on the decline for seven months, hitting a two-year low on Friday as investors continued to record huge losses.

Since the beginning of the year, investors have lost 1.2 billion dollars, with the negative turn contributing heavily to investors' flight.

FTSE NSE Kenya 15 Index and FTSE NSE Kenya 25 Index, which measure stock performance of 15 largest companies by market capitalization and 25 most liquid stocks at the NSE, closed the week at 1.8 percent (200.17) and 1.57 percent (199.91) lower respectively as compared to the previous week. Enditem